Summary

Learn how to 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 create an elegant cash flow with best practices and up-to-date excel functions.

Master sensitivity analysis which will enhance your real estate financial analysis, error checking skills and improve your underwriting processes.

Who should attend this course

Investment surveyors, real estate finance professionals and property consultants.


Details

Duration: 2/3 days
Location:  Online/ Hard Rock Hotel, London
CPD Hours: 12/18
Level: Intermediate/Advanced
Course fee:

Early Bird
plus VAT
Book Early & Save
Book & Pay min. 30 days before course start date
3 day Virtual Live £1,950
3 day In-Person £2,385
2 day Virtual Live £1,375
2 day In-Person £1,720
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Regular Price
plus VAT
Quality Training
Book & Pay less than 30 days before course start date
3 day Virtual Live £2,145
3 day In-Person £2,620
2 day Virtual Live £1,515
2 day In-Person £1,895
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Payment Plans available

The course fee includes training, course materials and post course support.

Dates

  • 13-14 & 17 February 2023
  • 24-25 & 28 April 2023

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Content


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


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


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

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 modelling and equipped with the tools (handy excel shortcuts included) to build a robust but organised 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.

For more testimonials click here.

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