Day 1 – Foundations of Real Estate Investment and Development
Foundations of Real Estate Development and Investment
- Why invest in real estate
- Four quadrants of real estate investment
- Real estate market cycles and their impact on investment decision
Overview of Private Equity in Real Estate
- Definition and key concepts
- Importance and role in the real estate market
- Current trends and market dynamics
Investment Strategies and Processes
- Core, core-plus, value-add, and opportunistic strategies
- Risk-return profiles of different strategies
The Investment Lifecycle
- Sourcing and acquiring properties
- Due diligence and underwriting
- Asset management and value creation
- Exit strategies and dispositions
Evaluating Real Estate Developments
- Gross Development Value (GDV) and Net Development Value (NDV)
- Residual Land Value (RLV)
Evaluating Real Estate Private Equity Deals
Performance Metrics and KPIs
- Internal Rate of Return (IRR)
- Equity Multiple
- Net Operating Income (NOI)
- Yields
- Worth or Investment Value
Case Study Analysis
- Real-world example of a private equity real estate development deal
Foundations of REITs
- Introduction to REITs: History and purpose
- Overview of REIT structures in different countries
- Emerging Markets and REITs: Opportunities and risks
- Market size and structure
- Types of REITs: development, operating, internal vs external
- The economic rationale for investing in REITs
REIT Investment Strategies
- Portfolio Diversification with REITs
- Public vs. Private REITs: Pros and cons
Legal and Regulatory Framework
- REIT Legislation: A global overview
- Tax considerations and requirements for REITs
- Governance and compliance in REIT operations
REIT Financials and Performance Metrics
- Understanding REIT Financial Statements
- Key Performance Indicators for REITs (FFO, AFFO, NAV)
- Analysing REIT dividend payout and sustainability
Valuation Techniques for REITs
- Intrinsic vs Relative Value
- Comparative analysis and benchmarking
- Identifying value and stock selection
- Market Trends Affecting REIT Sectors (Retail, Residential, Office, etc.)
- The impact of economic cycles on REIT performance
Risks and Opportunities in REIT Investment
- Macro-economic, sector and stock-specific risks
- ESG Risks
- Identifying and managing risks in REIT investment portfolios
- Legal and Regulatory Changes: Impacts on REITs
The Future of REITs
- Innovations in Real Estate: REITs and technology
- The outlook for REITs: Trends and predictions
Case Study Analysis
Real-world example of a publicly-traded REIT investment analysis
Day 2 – Fundamentals of Real Estate Debt Finance
Fundamentals of Real Estate Debt Finance
- The Real estate transactions’ capital stack
- The importance of debt in real estate transactions
Real Estate Market Analysis
- Understanding market trends
- Asset class demand
- ESG, lenders’ and borrowers’ approaches
- Evaluating market conditions for financing decisions
- Geographic and sector-specific considerations
Types of Real Estate Debt Instruments
- Commercial Real Estate Loans
– Characteristics of commercial loans
- Risk-Return
– Loan structures
- Interest-only
- Constant amortisation and remaining balloon payment
- Annuity
- Cash Sweep
Development Financing
- Financing new development projects
– Strategy: Residential/ Commercial; domestic/ international
- Risks and considerations
– Developing entity, credit worthiness, project experience
– Land development risks
– Design Risks
– Entitlement risks
– Financing Risks
– Cost overrun/ delay risk
– Lease risk
– Sale Risk
- Phases of development financing
– Total Development Costs and Sources of Funds
– S-Curve and Debt Drawdowns
Key terms and covenants
- Maturities: Development facility vs Investment properties
- Financial covenants/ Default covenants
- Reporting covenants/ Information covenants
Analysing real estate debt
- Financial Analysis Techniques from an investment and lending perspective
– Property Investment
– Net present value (NPV) and internal rate of return (IRR)
– Lending
– Debt service coverage ratio (DSCR)/ Interest Cover Ratio (ICR)
– Debt Yield
– Loan-to-value ratio (LTV)
Risk Assessment
- Identifying and mitigating risks
- Sensitivity analysis
- Stress testing financial models
Commenting on Legal and Regulatory Framework
- Legal Aspects of Real Estate Debt
– Key legal documents (Loan agreement/ Security documents including Fixed charge/ mortgages deed, floating charge, pledges over rental income accounts)
– Foreclosure process and implications
– Lender liability and borrower protections
- Regulatory Environment
– Overview of relevant regulations
– Basel III
– Output Floors
– Sustainable Finance Disclosure Regulation
– Art. 8 and 9
– Shariah Finance
– Impact of regulations on real estate finance
Case Studies and Practical Applications
Real-world example of a real estate debt financing transaction
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