Real Estate Valuation and Financing

Investing in and financing properties is one of the most difficult “games in town.” Therefore, it is crucial to keep up with current market changes and challenges to be able to exploit opportunities. This course has been designed to provide a practical and comprehensive knowledge of this entire subject.

Contents

Introduction to real estate market

• Characteristics of real estate assets
• Space & capital markets model
• Players and Investment styles

Real Estate Financial Analysis pro-forma forecasting

• Real Estate Profit & loss and Balance sheet
  • Cash flow statements with unlevered FCFO

Main return and value estimation financial metrics:

• Internal Rate of Return (IRR)
• Present Value (PV) & Net Present Value (NPV)
• Pay Back Period & Discounted Pay Back Period
• Equity Multiple, Property & Dividend Yields

An introduction to Property Valuation

• Value definitions: market value and investment value
• Appraisal methods

Real Estate Capital Markets

• Cost of equity & cost of debt
• Capital structure
• WACC

Excel for cash flow models

Case study: income producing property appraisal

Guest Speach on a Real Estate Development Project

Introduction to development appraisal

• Residual model technique, site and profit calculations
• Discounting development cash flows
• Case study on a Real Estate Development Project

Introduction to real estate finance

• Corporate & structured finance
• Bank loan contractual forms
• Income producing properties financing
• Term sheet examples
• Case studies on debt financing

Guest Speech on Debt financing

Case study: development project analysis with structured financing

Risk analysis & simulations

• Sensitivity and Scenario Analysis
• Monte Carlo Analysis

Course Wrap-up and Q&A

Learning Model

The course is a one-week full time program, including some social activities at the end of class time. It is delivered in a Classroom format, including some group work with instructor support. The course enrolment is restricted to no more than 20 attendees in order to maximize teacher to student interaction. Attendees are invited to bring their own laptop, though shared computers in private workspaces designed for group work are available. All study materials will be delivered in advance in electronic format and a hard copy of the most relevant readings and case studies will be delivered in class. During the program, students will receive a complete set of spreadsheets for all examples and case studies discussed in class.