Value-add commercial real estate investments requires complex financial modelling techniques. This is because the linkages of, for example, in-place lease contracts, capital expenditure curves, operating expenses, the forecast of future rents, refinancing and exit values could lead to a web of unintelligible formulas and cross-spreadsheet linkages that can be the model too complex and will inevitably result in errors.
Cambridge Finance expert trainers have therefore created the Real Estate Value-Add Strategies – Financial Modelling Course to help you in this scenario. This course will teach investment and lending professionals how to 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.
Our expert trainers have modelled several real estate value-add transactions and have therefore leveraged on their experience to teach our delegates how to deal with value-add strategies in a financial modelling environment. Also true to any of Cambridge Finance’s course, we will not only show you how to create the models, we will teach you how to interpret and interrogate the deal’s risk-adjusted returns and make investment and lending decisions.
Who should attend this course?
This course will give delegates the practical tools to model and analyse real estate value-add deals. It is therefore designed to meet the demands of real estate professionals who are looking for an all-rounded course in real estate financial modelling which deal with value-add scenarios.
You should attend this course if you want to:
- Advance your financial modelling skills and add more complex scenarios into your real estate models
- Be able to model and interpret the financial impact of different value-add scenarios, such as extend leases for hold or exit; or redevelop and sell
- Be able to automatically calculate carried interest and promote structures and analyse the financial returns and risks associated with them
- Feel confident at modelling value-add strategies in general and communicating them to clients and colleagues
This course will be particularly relevant to:
- Surveyors working for the capital markets providing investment advice
- Real estate underwriters working in lending institutions and insurance firms
- Analysts in private equity, pension and insurance, and consulting firms
- Asset managers managing investments or development projects
Duration: 1 day
Location: London or Online
CPD hours: 6 hours
Level: Intermediate / Advanced
(Payment plan available)
- 21 October 2022 – In Person or Virtual
- 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.
- 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