Add real estate risk and hurdle rates calculations to any financial model and use them to advise clients, lenders, joint-venture partners and other stakeholders on the risk-adjusted returns of real estate projects.
This course is aimed at all real estate consultants and analysts seeking to become an expert in real estate finance and financial modelling.
Delegates will learn to incorporate risk analysis and calculations of appropriate hurdle rates to their geared discounted cash flow models and perform investment and lending decisions based on robust financial thinking.
Who should attend this course:
The Real Estate Risk Analysis & Modelling courses are suitable for those willing to develop their finance and modelling skills to the next level. This is a course aimed at experienced professionals and modellers who would like to improve their real estate finance and modelling techniques to become an expert in the property finance field.
Duration: 2 days
CPD Hours: 12
Maximum number of delegates: 6
Real estate risk
Diversifiable versus non-diversifiable risks
Risks depending on property types: office, retail, industrial, mixed-use, housing
Credit risks associated with different phases of a property’s life cycle: from construction to lease-up and stabilisation.
Multiple components of risk associated with construction companies, developers, investors, properties and projects.
Cyclical property market forces that impact rents, vacancy, capitalization and interest rates
Monte Carlo simulation
Estimating hurdle / discount rates
Methods for calculating the cost of equity
Capital Asset Pricing Model (CAPM)
Arbitrage Pricing Model (APM)
Individual assets: prices and risk parameters
How comparable are assets within a real estate class?
Understanding market indices: MSCI IPD, FTSE EPRA/NAREIT, Case & Shiller
Applying indices to derive discount / hurdle rates
Methods for calculating the cost of debt
Pre- and after-tax cost of debt
Global portfolios, risk and hurdles rates
Country risk premium
Market risk premium
Industry risk premium