Real Estate Masterclass

Overview

Real estate as an asset class requires an understanding of specific industry terminology, an analytical approach to modeling both indirect and direct property level cash flows and an assessment of capital investment structures including debt structuring and equity waterfall analysis.

On Day 1, delegates on this two-day course will be introduced to real estate terminology and real estate related cashflows, measures and return metrics.  They will also apply modeling techniques to indirect property investments including REIT analysis and valuation. 

On Day 2, delegates will focus on direct real estate investment including land acquisition and development, the analysis of construction costs using the average spread and normal distribution approaches, assess property characteristics, establish unlevered and levered cashflows and model amortized and interest only debt repayment structures and equity waterfall returns analysis based on limited partner and general partner joint venture arrangements.

What you'll learn

Day 1 - Learning outcomes

Overview of the real estate industry and terminology

• Definition of specific real estate industry terms
• Distinction between direct and indirect property investing
• Assessment of indirect property investing platforms

Understanding real estate cashflow measures and metrics

• Calculation of cashflow measures including NPV, IRR, XIRR, MIRR, DSCR, cash on cash Return and money multiples

RE financial modeling best practice and excel fundamentals

• Excel keyboard shortcuts
• Functions and formulas useful for real estate modeling
• Best practice and principles of three statement modeling

REIT Valuation and modeling

• Financial statement analysis - rental growth, NOI margin, Funds from Operations and Adjusted Funds from Operations
• Financial forecasting - rental growth, maintenance capex and investment capex
• Debt modeling - cash sweep, convenant testing and new debt issuance
• REIT valuation including multiples and cashflow valuation

Real estate scenarios and sensitivity analysis

• Building scenarios into models – Choose, Offset, Index and Match
• Running sensitivities on model outputs – One input data tables, Two input data tables, Three input data tables

Day 2 - Learning outcomes

Modeling land acquisition and development

• Creating dynamic dates schedules
• Identification and analysis of hard costs versus soft costs
• Allocating costs using straight line and normal distribution methodologies
• Modeling construction equity drawdown
• Modeling construction debt finance and interest roll-up

Modeling property level cashflows

• Calculating gross and net revenues
• Identifying and modeling property related costs
• Calculating net operating income, unlevered and levered cashflows
• Calculating property sale value

Modeling property related debt

• Applying interest only and amortizing principles to debt modeling
• Assessing the impact of debt structures on property level return cashflows

Modeling equity returns and waterfall structures

• Identifying joint venture relationships
• Assessing the distribution of property level cashflows via waterfall distribution structures

Course Information

9.00am - 5.00pm GMT/BST/EST

2 days (non-exam)

Venues

London: Tenter House, 45 Moorfields, London EC2Y 9AE

New York: 275 Madison Ave Suite 1201, New York, NY 10016

APAC - What is a Virtual Classroom?

Virtual Classroom training is a new and highly engaging way of delivering programs remotely with enhanced levels of interactivity compared to conventional webinars. In AMT’s Virtual Classroom participants are encouraged to activate their own webcams and mics throughout the class allowing for real-time engagement, both verbal and non-verbal, with fellow participants and their trainer. Participants can also share their screens to get instant assistance in any technical exercise; just like asking the trainer to walk over and help in the classroom! We have seen a step-change in participant engagement with this new technology. The trainer’s ability to see a selection of their participants’ faces in real-time, and to react to their verbal and non-verbal cues creates a remarkably realistic classroom-like experience. 

Prerequisites

We recommend delegates have a solid understanding of financial statement analysis (balance sheet, income statement and cash flow) and financial modeling skills.