Construct a robust real estate financial model to assess the financial risk and return profile of development, re-development, refurbishment and value-add investments. Break down the complexities of real estate value-add strategies and show them how to create an elegant cash flow model that will follow best practices and use the most up-to-date Excel functions. 

This course is aimed at investment surveyors,  real estate finance professionals and property consultants seeking to build robust real estate development models free of errors.

Delegates will learn to construct a financial model for viability analysis in development, re-development of commercial and residential properties. Delegates will also learn how to produce sensitivity analysis, which will enhance their real estate financial analysis,  error checking skills and improve their underwriting processes.

Who should attend this course:

The Real Estate Development, value add strategies and Financial Modelling in Excel courses are suitable for the intermediate to advanced financial modeller, who is seeking to develop their modelling skills and become an expert financial modelling for real estate development.


Details

Duration: 3 days (9am to 5pm)
Location:  London in person or online
CPD Hours: 18
Level: Intermediate/Advanced
Course fee:

Early Bird
plus VAT
Book Early & Save
Book & Pay min. 30 days before course start date
Virtual Live £1,695
In-Person £2,070
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Regular Price
plus VAT
Quality Training
Book & Pay less than 30 days before course start date
Virtual Live £1,865
In-Person £2275
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Payment Plans available

Next Dates:

  • 19-21 October 2022 –  In Person or Virtual
  • 14-16 December 2022 –  In Person or Virtual

Please note – Due to Covid regulations, delegates attending our In-Person courses need to bring their own laptop to the course.

If you can’t make the dates or require on demand courses please contact us.

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Content


In Person & Virtual: Day 1


Residual Valuation Appraisal

Property Yields

Land Value

Profit Appraisal

Gross and Net Development Values

Return on GDV, Cost and Equity

Pro-forma development cash flow 

Inputs:

  • Timings: purchase date, works start date, planning, lead in, construction and refurbishment, void period, lease start, sale date
  • Revenue: sales proceeds, estimated rental value per sqf, net internal areas, rental growth and target returns
  • Development Costs: construction and refurbishment, site purchase and vacant possession value, contingency, professional fees, statutory costs, allowances and rights
    • S-Curve vs. Straight Line

Outputs:

  • Internal Rate of Return (IRR)
  • Net Present Value (NPV)
  • Maximum Bidding Price
  • Total profit, profit on cost and equity multiple

 

Financial viability testing & risk analysis

Data tables & sensitivity analysis

Risk visualisation techniques

Case study: un-geared office redevelopment in the UK

 


In Person & Virtual: Day 2


Development finance

  • Debt & Equity Structures
  • Senior Debt
  • Mezzanine Loan

Geared cash flow

Debt Types

  • Rolled-up interest senior debt
  • Equity first capital deployment waterfall
  • Debt repayment structures for development finance

Joint-venture structures

  • Equity waterfall structure
  • Preferred returns
  • Promote Cash Flow

Capitalised interest & circularities

Case study: geared office redevelopment in the UK


In Person & Virtual: Day 3


Details

  • Current in-place leases, operating expenses – vacancy costs, including rates and empty costs
  • Site acquisition including options, pre-development and planning costs
  • Equity and debt drawdowns, including mezzanine finance

Construction period

  • Development hard and soft costs using S-curve, Straight line and Known curves
  • Construction finance drawdowns following an equity-first model

Lease-up and stabilisation period

  • New leases with gross and net lease clauses
  • Tenant incentives such as rent-free and capital expenditure contributions
  • Operating expenses – delayed rates, letting fees, service charges and void costs

Investment options modelling

  • Lease re-gearing, hold or sell
  • Re-develop, refinance and hold
  • Re-develop, stabilise and sell

Sources of funds

  • Calculating debt and equity peaks
  • Modelling the debt repayment waterfall
  • Calculating total cost of debt (interest and fees)

Carried Interest / Promote Structures

  • Profit shares and preferred equity returns
  • Equity returns based on different IRR tiers

Risk modelling and presentation

  • Sensitivity analysis (2-way data tables)
  • Scenario analysis
  • Financial ratios: IRR, NPV, Residual Land Value, Profit on Cost, Profit on GDV, Equity Multiple

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What our customers say:

I participated in Cambridge Finance’s two-day, real estate development modelling course and benefited immensely from:

  • An extremely well-structured course;
  • An interactive class, taught at pace;
  • A highly knowledgeable and engaging instructor; and
  • Excellent course material.

Ultimately, I came away from the course more confident in my modeling and equipped with the tools (handy excel shortcuts included) to build a robust but organized development model.

I highly recommend the Cambridge Finance team and for any entry level or intermediate employees looking to refine their skills.”

Laura, Real Estate Finance professional.


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