Construct a robust real estate financial model to assess the financial risk and return profile of development, re-development and refurbishment projects.
This course is aimed at banking and lending analysts for real estate, 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 and scenario 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 and Financial Modelling in Excel courses are suitable for the beginner or intermediate financial modeller, who is seeking to develop their modelling skills and become an expert financial modelling for real estate development.
Details
Duration: 2 days
Location: London
CPD Hours: 12
Level: Basic / Intermediate
Maximum number of delegates: 8
Next Dates: 20 & 21 August, 2018
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, mezzanine second, senior debt
Joint-venture structures
- Waterfall structure
- Preferred returns
- Promote Cash Flow
Capitalised interest & circularities