Cap Rate Trends, Methodology and Analysis. Dane R. Anderson MAI, CCIM Appraisal & Litigation Services Director
|
|
- Kelley Gray
- 5 years ago
- Views:
Transcription
1 Cap Rate Trends, Methodology and Analysis Dane R. Anderson MAI, CCIM Appraisal & Litigation Services Director 1
2 Quickly The Income Approach Basis of the Approach Present worth of future benefits Two Methods: Direct Capitalization One year s income converted to value Yield Capitalization (Discounted Cash Flow) Multiple years income and likely reversion (future sale) converted to a present value using a yield rate Chapter 21, The Appraisal of Real Estate, 14 th Edition 2
3 Quickly Direct Cap, Cap Rate and Theory Value = Net Operating Income (NOI) Overall Capitalization Rate Value = Income x Factor Overall Capitalization Rate = Capitalization Rate = Cap Rate = OAR = Ro = R 3
4 Quickly Direct Cap, Cap Rate and Theory Example Office Building with $500,000 of NOI 10% Cap Rate $500,000 / 10% = $5,000,000 4
5 Quickly The Cap Rate and Theory What s a Cap Rate? Overall Capitalization Rate (Ro) An income rate for a total real property interest that reflects the relationship between a single year s net operating income expectancy and the total property price or value. (Page 456 of 14 th edition of The Appraisal of Real Estate) Layman s Definition of Cap Rate The ratio between a single year s net operating income and its value. 5
6 RERC Real Estate Report Overview 2 nd Quarter 2013 Report Currently Out 3 rd Quarter Report Due Out in November Currently in its 40 th Year of Production Investor ratings, investment criteria, economic data, and commentary 6
7 RERC Real Estate Report Laying the Foundation Some Definitions Institutional: High quality (minimum value of $5 million per property) commercial real estate that is generally owned or financed at least in part by taxexempt investors on behalf of beneficiaries in a fiduciary environment (i.e., public and corporate pension funds, endowments and foundations, life insurance companies, commercial banks, real estate investment trusts, sovereign wealth funds, etc.). 7
8 RERC Real Estate Report Laying the Foundation Some Definitions Regional: Generally average to good quality (below $5 million per property) CRE, that is income producing but more local in nature. RERC s regional survey respondents generally work on a metro, statewide, or regional level. 8
9 RERC Real Estate Report Laying the Foundation Some Definitions 1 st Tier Investment Properties new or newer quality construction in prime to good locations. 2 nd Tier Investment Properties aging, former firsttier properties, in good to average locations. 3 rd Tier Investment Properties older properties with functional inadequacies and/or marginal locations. 9
10 Recent Trend in Yield and Cap Rates Source: RERC, 2Q
11 Yields Up, Cap Rates Fluctuating Preliminary 3 rd Quarter Data 11
12 Regional Required Cap Rates 12
13 48 Metros Covered Here is Chicago 13
14 Time to Buy, Sell, or Hold? Historical Buy Sell Hold Recommendations (Preliminary 3 rd Quarter Data) Rating Source: RERC, 3Q
15 Investment Conditions Preliminary 3 rd Quarter Data 15
16 CRE vs. Alternatives 16
17 Strength of CRE Moving Forward NCREIF Value Index Sources: NCREIF, NBER, 2Q
18 RERC NPI Forecast Sources: NCREIF, RERC, 2Q Note: Shaded area reflects RERC s outlook for the Base, Upside, and Downside scenarios, from 3Q13 to 1Q15. RERC projects a value change in 2013 between 3% and 8.25%. With income return of 6%, total unleveraged returns are expected to range from 9% to 14.25%, with the base case near 12.5% for the year. 18
19 Cap Rate Methods and Analysis Methods of Deriving a Cap Rate Strengths/Weaknesses Pitfalls Practical Examples of Common Issues 19
20 Derivation of the Cap Rate Analytical Methods: Extraction from Sales Band of Investment Underwriter s Method (Debt Coverage Analysis) Qualitative Methods: Investor Surveys Market Participant Interviews 20
21 Sales Extraction Method Formula Again: Ro = Io/Vo Strengths Market derived Easy to understand and explain Preferred method according to the 14 th edition of The Appraisal of Real Estate (page 493) Often utilized by market participants Implicitly reflects buyer/seller investment assumptions about each individual sale Weaknesses Rife with pitfalls No standard method of NOI derivation Gross leased properties include more potential issues than net leased Data from an inefficient market Easily manipulated, especially when estimated from fee simple sales A historical, not current, indication Sales Extraction covered on pages of The Appraisal of Real Estate, 14 th edition 21
22 Sales Extraction Method Potential Pitfalls Source and basis of NOI Above/below market rents Stabilization of property Physical differences Vacancy and collection loss Economic differences Cash equivalency issues Buyer/seller motivations Turnover/tenant risk Dated sales Near term capital expenditures Leased fee sales for fee simple valuations Differing levels of appreciation Sale leaseback/operating leases Conditions of sale Inadequate data 22
23 Sales Extraction Pitfalls Different Bases of NOI Example Comparable Building Sold for $1,000,000 Basis Indicated NOI Cap Rate Actual Year End 2012 $75, % Annualized 9 Month YTD $100, % Broker Pro Forma $130, % Subject Appraiser s Stabilized Estimate $150, % Which cap rate is correct? Without knowing more, what appears to have been happening? Does this happen in practice? 23
24 Sales Extraction Pitfalls Different Bases of NOI Example Subject Value Impact Subject stabilized NOI: $110,000 Fee simple analysis Source of Comparable NOI Cap Rate Indicated Subject Value Actual Year End % $1,466,667 Annualized 9 Month YTD 10.0% $1,100,000 Broker Pro Forma 13.0% $846,154 Subject Appraiser s Stabilized Estimate 15.0% $733,333 24
25 Sales Extraction Pitfalls Different Sources of Extracted Cap Rate Appraiser s Within an Office Analyzing Subject s Differently $200/unit vs. $350/unit reserve for apartments One appraiser stabilizes the NOI and another uses actual Data From Different Appraisal Offices XYZ Appraisal Company appraised the property and said the cap rate was X.X% Broker John Doe, the selling broker, indicated the cap rate was X.X% Same issues as from the other appraisal office 25
26 Sales Extraction Pitfalls Different Bases of NOI Example Apartment Reserves $200/unit vs. $350/unit 100 Unit apartment building, $4,000/Unit NOI before reserves, 8% Cap Rate $4,750,000 vs. $4,562,500 4% Difference Other Areas This Happens: Management Fee Vacancy and Collection Loss Repairs & Maintenance Income Lease Up Discounts or Premiums Variable Expenses Non stabilized Properties 26
27 Sales Extraction Pitfalls Turnover / Tenant Risk Long term leased properties sell for lower capitalization rates When does lease term start to impact the capitalization rate? < 3 Years < 5 Years < 10 Years < 20 Years Discount to Base Rate Base Premium in Price/Lower Cap Rate Moderate Premium over 10 Yrs 27
28 Sales Extraction Pitfalls Different Sources and Bases But these are small issues do they really impact value? Yes, cumulatively they result in significant differences in value Can show inconsistency in methodology Can help bring the two sides closer together 28
29 Band of Investments Primary Method is Mortgage/Equity Analysis: Mortgage Component + Equity Component = Capitalization Rate Calculation of Mortgage and Equity Components: Mortgage Component = M x R M Equity Component = E x R E M = Loan to value ratio E = Equity ratio R M = Mortgage capitalization rate (mortgage constant) R E = Equity capitalization rate (equity dividend rate) 29
30 Band of Investments Strengths Relatively easy to understand/explain Data available in the market Weaknesses Not typically utilized by market participants Inputs from an inefficient market Potential Pitfalls Low interest rate environment limits applicability Age/condition of property Near term capital expenditures Inputs not always market derived Easily manipulated Band of Investments covered on pages of The Appraisal of Real Estate, 14 th edition 30
31 Band of Investments Example Lender Indicated Terms 5 6% interest rate 20 to 25 year amortization period 3 to 7 year term and 70 75% LTV Equity Dividend Rate Investor Survey 7 12%, average 9% Extracted from Sales 4 7% 31
32 Band of Investments Example What do the lender and EDR data indicate? Assume 5.5% interest rate (average) Assume 75% LTV Assume 9% EDR What s the cap rate with 20 vs 25 year amortization? 25 year indicates 7.78%, 20 year indicates 8.44% On a property with $1,000,000 in NOI: 25 year amortization: $12,820, year amortization: $11,848,340 +/ 7.5% change 32
33 Debt Coverage Ratio Method The Debt Coverage Ratio (DCR) Formula: DCR = I O /I M The DCR formula manipulated to indicate the following formula: R O = DCR x R M x M DCR Method covered on pages of The Appraisal of Real Estate, 14 th edition 33
34 Debt Coverage Ratio Method Strengths Derived with only lender info Weaknesses Not typically utilized by market participants Less intuitive than other methods Doesn t consider investor requirements Potential Pitfalls Low interest rate environment makes it less reliable Non stabilized properties and resulting NOI utilized Age/condition of property Near term capital expenditures Inputs not always market derived Easily manipulated 34
35 DCR Method Example Same Mortgage Terms as for Band of Investments: Assume 5.5% interest rate (average) Assume 75% LTV Assume 9% EDR Assume 1.25 DCR requirement What s the Cap Rate With 20 vs 25 yr Amortization? 20 year amortization 7.71% = 1.25 x 8.22% x75% 25 year amortization 6.68% = 1.25 x 7.34% x 75% 35
36 Published Investor Surveys Strengths Utilized by investors/buyers/sellers Directly reflects recent market participant investment criteria Very easy to understand/explain Historical surveys useful for retrospective valuations Avoid pitfalls of individual transaction rates of an inefficient market Weaknesses No standard method of NOI derivation Basis of derivation can differ from subject appraisal premise Limited data for secondary markets Limited data for tertiary markets Not typically relevant for noninstitutional grade properties Surveys covered on page 499 of The Appraisal of Real Estate, 14 th edition 36
37 Published Investor Surveys Potential Pitfalls Application of data to property types not covered Utilization for non institutional grade properties Utilization in secondary or tertiary markets Averages often cited but not necessarily appropriate 37
38 Market Participant Interviews Strengths Directly reflects current market participant investment criteria Very easy to understand/explain Weaknesses No standard method of NOI estimation One market participants opinion not reflective of a market Hard to have market participants estimate retrospective opinions Potential Pitfalls Guiding the market participant Appraiser interpretation of interview Brokers and investors have their own agendas 38
39 Concluding Points Primary pitfall not obtaining and verifying reliable data. Each cap rate estimation method includes potential for manipulation. Real estate markets are not always efficient. 39
40 A successful man is one who can lay a firm foundation with the bricks others have thrown at him Thank You!! Questions? 40
41 41
Chapter 18. Investors have different required yields Different risk assessment Different opportunity cost of equity
Decision Making in Real Estate Centers Around Valuation Chapter 18 Investment Decisions: Ratios We examined the concept of market value in Chapters 7 & 8 As noted, professional RE appraisers are often
More informationRisk Management Insights
Risk Management Insights Appraisal Review Part II: Income Capitalization Approach George Mann, Managing Director and Chief Appraiser, Collateral Evaluation Services, Inc.and Nikki Griffith, MAI, CCIM,
More informationBasics of Commercial Real Estate Transactions Day Two
Basics of Commercial Real Estate Transactions Day Two John Rockwell, Partner Energy October 12, 2016 PG&E refers to the Pacific Gas and Electric Company, a subsidiary of PG&E Corporation. 2010 Pacific
More informationUNDERSTANDING THE DEVELOPMENT PRO FORMA
UNDERSTANDING THE DEVELOPMENT PRO FORMA March 16, 2017 ULI Urban Leadership Program Dr. Steven Webber Ryerson University/Urbanformation Consulting Pro forma Financial analysis based on Revenues Costs Return
More informationThe Village at Centre Point 20-Plex 3547 N Eagle Road Meridian, ID 83646
Property Report The Village at Centre Point 20-Plex Presented by: RE/MAX Equity/Silvercreek Realty 295 W Center St Suite A/1099 S Wells St #200 Provo/Meridian, UT/ID 84601/83642 Mobile: FIG Disclaimer:
More informationThe Village at Centre Point 8-Plex 3547 N Eagle Road Meridian, ID 83646
Property Report The Village at Centre Point 8-Plex Presented by: RE/MAX Equity/Silvercreek Realty 295 W Center St Suite A/1099 S Wells St #200 Provo/Meridian, UT/ID 84601/83642 Mobile: FIG Disclaimer:
More informationTHE ELUSIVE CAP RATE Finding & Supporting Cap Rates in Uncertain Times
THE ELUSIVE CAP RATE Finding & Supporting Cap Rates in Uncertain Times Presented May 14, 2013 at the New Hampshire Association of Assessing Officers in Concord, NH by Peter F. Korpacz, MAI, CRE, FRICS
More informationIn-Depth Capitalization Rate Review
In-Depth Capitalization Rate Review Leonard J. Patcella, Jr., CMI, MAI President Equity Appraisal Co., Inc. Springhouse, PA jack.equityappraisal@comcast.net David A. Schneider, Esq. Partner Archer & Greiner,
More informationRetail Acquisition Example
Property Information Retail Acquisition Example Project Assumptions Acquisition Assumptions Property Name Retail Acquisition Example Project Type Acquisition Location Austin, TX Acquisition Cost $1,800,000
More informationTypical Valuation Approaches and How to Deal With Them
Typical Valuation Approaches and How to Deal With Them January, 2018 Anthony F. DellaPelle, Esq., CRE Shareholder, McKirdy, Riskin, Olson & DellaPelle, P.C. Morristown, New Jersey Christian F. Torgrimson,
More information$450,000 $63,425 $39, % PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE
Executive Summary Key Property Metrics $450,000 $63,425 $39,143 14.1% PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE $70,000 $60,000 $50,000 $40,000 $30,000 Annual Cash Flow Repairs, 8%
More informationChapter 8. How much would you pay today for... The Income Approach to Appraisal
How much would you pay today for... Chapter 8 One hundred dollars paid with certainty each year for five years, starting one year from now. Why would you pay less than $500 Valuation Using the Income Approach
More informationTHE APPRAISAL OF REAL ESTATE 3 RD CANADIAN EDITION BUSI 330
THE APPRAISAL OF REAL ESTATE 3 RD CANADIAN EDITION BUSI 330 REVIEW NOTES by CHUCK DUNN CHAPTER 20 Copyright 2010 by the Real Estate Division and Chuck Dunn. All rights reserved CHAPTER 20 - THE INCOME
More informationPower Analy$I$ Maximizing Inve$tment Return$ With Your Computer
Power Analy$I$ Maximizing Inve$tment Return$ With Your Computer New Version 10.0 Developed by: James F. Little, MBA, CCIM www.1031.com JamesFLittle@MSN.com Introduction New Version 10.0 The following screen
More informationBroker. Investment Real Estate. Chapter 15. Copyright Gold Coast Schools 1
Broker Chapter 15 Investment Real Estate Copyright Gold Coast Schools 1 Learning Objectives Matching an investor with the right property Evaluating the sites and improvements of income properties Determining
More informationVillage at Parkway Lakes Fourplex Gosling and Kuykendahl Spring, TX 77379
Property Report Village at Parkway Lakes Fourplex Presented by: Fourplex Investment Group RE/Max Equity 295 West Center Street Provo, UT 84601 FIG is not a company, but a marketing platform. All information
More informationProperty Report 1434 NW 92. Presented by:
Property Report 1434 NW 92 Presented by: Jeff Straka Berkshire Hathaway-Commercial 16301 N. May Avenue Edmond, OK 73012 Office: Mobile: (405)416-4415 This is a pro forma based upon the information the
More informationValbridge Valuation Advisory
Valbridge Valuation Advisory Re: Attn: Multi-Family Property Taxes Lenders and Purchasers Cash is king, and property taxes can kill the cash flow of a multi-family property. What does that mean to you?
More informationProject Economics: The Value of Leasing. Russell Banham, Savills
ICSC European Retail Property School Project Economics: The Value of Leasing Russell Banham, Savills (Investment, Development & Asset Management) Introduction Who I am Russell Banham Over 30 years of experience
More informationBUSI 330 Suggested Answers to Review and Discussion Questions: Lesson 10
BUSI 330 Suggested Answers to Review and Discussion Questions: Lesson 10 1. The client should give you a copy of their income and expense statements for the last 3 years showing their rental income by
More informationAtwater ave Fiscal Year Beginning January 2019
10-Year After Tax Cash Flow Analysis INITIAL INVESTMENT Purchase Price + Acquisition Costs - 1st Mortgage + Total Loan Fees and Points Initial Investment $949900 $9499 $474950 $4750 $489198 MORTGAGE DATA
More informationClark Bro's Rentals 113 Clark Drive Vidalia, LA 71373
Property Report Presented by: Matthew J. Galofaro, CCIM 14454 University Ave. Hammond, Louisiana 70401 Office: Mobile: (985) 969-8473 Fax: (985) 542-7760 Disclaimer: All information deemed reliable but
More informationUnderstanding and Using Real Estate Cap Rates Charles A. Long Junction Properties, LLC October 24, Urban Land Institute Real Estate Cap Rates
Understanding and Using Charles A. Long Junction Properties, LLC October 24, 2017 1 Learning Objectives: 1. Factors determining a particular real estate capitalization rate. 2. Return on investment decisions
More informationChapter 8. How much would you pay today for... The Income Approach to Appraisal
How much would you pay today for... Chapter 8 One hundred dollars paid with certainty each year for five years, starting one year from now. Why would you pay less than $500 Valuation Using the Income Approach
More informationBridge Financing & Valuation Trends Amid a Changing CRE Landscape ARBOR.COM 800.ARBOR.10
Bridge Financing & Valuation Trends Amid a Changing CRE Landscape ARBOR.COM 800.ARBOR.10 Today s Speakers Gianni Ottaviano Senior Vice President, Structured Finance Production, Arbor Realty Trust, Inc.
More information4 Unit Investment Property 329 N 2nd St W Missoula, MT 59802
Property Report 4 Unit Investment Property Presented by: Ink Realty Group 148 South Ave W Missoula, MT 59801 Office: 406-728-8270 Mobile: Fax: 406-728-2315 All data is from sources deemed reliable but
More informationBUSI 331: Real Estate Investment Analysis and Advanced Income Appraisal
BUSI 331: Real Estate Investment Analysis and Advanced Income Appraisal PURPOSE AND SCOPE The Real Estate Investment Analysis and Advanced Income Appraisal course BUSI 331 is intended to build upon the
More informationChapter 8. The Income Approach to Appraisal. Two Approaches to Income Valuation. How Does DCF Differ from Direct Cap? Rationale:
The Income Approach to Appraisal Chapter 8 Valuation Using the Income Approach Rationale: Value of a property is the present value of its anticipated income. Often called income capitalization Capitalize:
More informationCreating Reliable Valuations
Two Case Studies Creating Reliable Valuations Mark Polon, CCIM Polon Consulting www.polonconsulting.com
More informationReal Estate & REIT Modeling: Quiz Questions Module 1 Accounting, Overview & Key Metrics
Real Estate & REIT Modeling: Quiz Questions Module 1 Accounting, Overview & Key Metrics 1. How are REITs different from normal companies? a. Unlike normal companies, REITs are not required to pay income
More informationThe construction loan collapses a series of costs (cash outflows) incurred during the construction process into a single value
he construction loan collapses a series of costs (cash outflows) incurred during the construction process into a single value as of a single (future) point in time (the projected completion date of the
More informationBaric Lawndale S. Karlov St Chicago, IL Buildings. 115 Total Units. Rehabbed Buildings with all Separate Mechanicals
For more information contact: MIC PROPERTIES micproperties@gmail.com 8 Buildings. 115 Total Units Rehabbed Buildings with all Separate Mechanicals Large Units with an Attractive Mix (86-3BR and 29-2BR)
More informationMEMORANDUM ADDENDUM. Dan Moye, Economic Development Corporation of Kansas City, Missouri
MEMORANDUM ADDENDUM TO: FROM: Dan Moye, Economic Development Corporation of Kansas City, Missouri Fran Lefor Rood, SB Friedman Development Advisors Direct: (312) 424-4253; Email: frood@sbfriedman.com DATE:
More informationNorth Seattle College RES 217 Session 5. Market Feasibility and Financial Analysis
North Seattle College RES 217 Session 5 Market Feasibility and Financial Analysis Preliminary Analysis Completed Back-of-the-Envelope Analysis (aka, Back-of-the-Napkin) Main advantage to back-of-the envelope
More informationGreystone Arms San Juan Road, San Diego, CA Brendan Erickson, BTE. Vice President
, Upgraded Units with Large Square Footage & Contemporary Finishes Throughout Coveted Mission Hills Heritage Park Location Near Recreation, Restaurants, and Shopping New Appliances and Hardwood Floors
More informationREAL ESTATE INVESTMENTS
REAL ESTATE INVESTMENTS PROBLEM SET 2 1. PROBLEM The leases for space in an office building provide for limitations or stops on the lessor s liability for real estate taxes and operating expenses. Each
More informationFully Stabilized 24-Unit Property at 11% Cap Rate!
Fully Stabilized 24-Unit Property at 11% Cap Rate! To Insert a Picture here, click inside this box with your mouse, then click on "INSERT PIC" button on the right and select the picture 24 Units consisting
More informationWYOMING DEPARTMENT OF REVENUE CHAPTER 7 PROPERTY TAX VALUATION METHODOLOGY AND ASSESSMENT (DEPARTMENT ASSESSMENTS)
CHAPTER 7 PROPERTY TAX VALUATION METHODOLOGY AND ASSESSMENT (DEPARTMENT ASSESSMENTS) Section 1. Authority. These Rules are promulgated under the authority of W.S. 39-11-102(b). Section 2. Purpose of Rules.
More informationconcepts and techniques
concepts and techniques S a m p l e Timed Outline Topic Area DAY 1 Reference(s) Learning Objective The student will learn Teaching Method Time Segment (Minutes) Chapter 1: Introduction to Sales Comparison
More informationThe Basics of Commercial Real Estate
The Basics of Commercial Real Estate A Layman s Guide to Getting Started Michael Shields, CCIM Apartment / Investment Broker michael@svmultifamily.com 408-354-7470 Agenda The Commercial Real Estate Market
More informationCourse Income Approach To Value. Course Description
Course 102 - Income Approach To Value Course Description The Income Approach to Valuation is designed to provide the students with an understanding and working knowledge of the procedures and techniques
More informationDania Beach Multi Family 126 NW 8th Ave Dania Beach, FL 33004
Dania Beach Multi Family Turn key apartment bulling with full management services in place. Completely renovated property with impact windows and newer roof. 8.07% Cash on Cash return with 30% down payment.
More informationThe Neponset 400 Neponset Avenue Boston, MA 02122
Location, Location, Location Approx 210,000 per day traffic count jfitzgerald@remax.net Phone: (617) 268-5100 Fax: (617) 268-5160 738 E Broadway Boston, MA 02127 www.baystateliving.com Table of Contents
More informationHOTEL CAPITALIZATION RATES AND THE IMPACT OF CAP EX
JANUARY 2014 PRICE $500 HOTEL CAPITALIZATION RATES AND THE IMPACT OF CAP EX Author Suzanne R. Mellen, MAI, CRE, ISHC, FRICS Senior Managing Director www.hvs.com HVS San Francisco 100 Bush Street, Suite
More informationOFFERING MEMORANDUM FOR INVESTORS LOOKING for a LEGITIMATE 10%+ IRR YIELD
OFFERING MEMORANDUM FOR INVESTORS LOOKING for a LEGITIMATE 10%+ IRR YIELD Property has years of 100% occupancy with waiting list Av. length of stay about 7 years, some as long as 16, some 2 nd generation
More informationPROJECT FINANCE & APPRAISAL Translating the Value of Regenerative Design into Real Estate Speak. Matt Macko Environmental Building Strategies
PROJECT FINANCE & APPRAISAL Translating the Value of Regenerative Design into Real Estate Speak Matt Macko Environmental Building Strategies The Developer Role Understand your client! How a developer thinks
More informationClassify and describe basic forms of real estate investments.
LOS 43.a 2017 CFA Exam SS 15 Classify and describe basic forms of real estate investments. Card 1 of 52 LOS 43.a There are four basic forms of real estate investment; private equity (direct ownership),
More informationReal Estate & REIT Modeling: Course Outline
Real Estate & REIT Modeling: Course Outline Click Here to Sign Up Now for the BIWS Real Estate & REIT Modeling Course The topics in Real Estate & REIT Modeling teach you everything you need to know about
More informationChapter 1 Economics of Net Leases and Sale-Leasebacks
Chapter 1 Economics of Net Leases and Sale-Leasebacks 1:1 What Is a Net Lease? 1:2 Types of Net Leases 1:2.1 Bond Lease 1:2.2 Absolute Net Lease 1:2.3 Triple Net Lease 1:2.4 Double Net Lease 1:2.5 The
More informationPREPARING FOR THE MINNESOTA INCOME PROPERTY CASE STUDY EXAM WORKSHOP
PREPARING FOR THE MINNESOTA INCOME PROPERTY CASE STUDY EXAM WORKSHOP Date: September 18, 2018 Location: Country Inn & Suites Chanhassen, MN Instructor: Bob Wilson, CAE, ASA Revised October, 2017 PREPARING
More informationPart 1. Estimating Land Value Using a Land Residual Technique Based on Discounted Cash Flow Analysis
Table of Contents Overview... v Seminar Schedule... ix SECTION 1 Part 1. Estimating Land Value Using a Land Residual Technique Based on Discounted Cash Flow Analysis Preview Part 1... 1 Land Residual Technique...
More informationFOR SALE. $8,900,000 MultiFamily. Batesville, Ar Harrison Street PROPERTY HIGHLIGHTS
$8,900,000 MultiFamily Batesville, Ar 72501 FOR SALE 4323 Harrison Street PROPERTY HIGHLIGHTS 104 Total Luxury Units 72-2 Bedroom, 2 Bathroom Units 16-3 Bedroom, 2 Bathroom Units 16-1 Bedroom, 1 Bathroom
More informationReal Estate Appraisal
Market Value Chapter 17 Real Estate Appraisal This presentation includes materials from Ling and Archer, 4 th edition, Real Estate Principles The highest price a property will bring if: Payment is made
More information$450,000 $63,425 $33, % PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE
Executive Summary Key Property Metrics $450,000 $63,425 $33,431 14.1% PURCHASE PRICE NET OPERATING INCOME ANNUAL CASH FLOW CAP RATE $60,000 $50,000 $40,000 $30,000 Annual Cash Flow Maintenance & Repairs,
More informationMASS HOUSING PRO FORMA LINE ITEM EXPLANATIONS 132 Unit Project. The Residences at West Union
MASS HOUSING PRO FORMA LINE ITEM EXPLANATIONS 132 Unit Project The Residences at West Union Page 5 Affordable Unit Rates: The affordable unit rental rates listed on page 5 of the pro forma list projected
More informationProposed Accounting Standards Update (Revised), Topic 842: Leases; issued May 16, 2013.
Financial Accounting Standards Board Technical Director - File Reference No. 2013-270 Financial Accounting Standards Board 401 Merritt 7 - PO Box 5116 Norwalk, CT 06856-5116 August 23, 2013 Re: Proposed
More information7224 Nall Ave Prairie Village, KS 66208
Real Results - Income Package 10/20/2014 TABLE OF CONTENTS SUMMARY RISK Summary 3 RISC Index 4 Location 4 Population and Density 5 RISC Influences 5 House Value 6 Housing Profile 7 Crime 8 Public Schools
More informationMANUFACTURED HOME PARK LOAN PROGRAM TERM SHEET
MANUFACTURED HOME PARK LOAN PROGRAM TERM SHEET Description: The Manufactured Home Park Loan Program provides permanent financing for the acquisition of mobile home parks (MHPs) by organizations interested
More informationASSESSMENT METHODOLOGY
2018 ASSESSMENT METHODOLOGY MULTI-RESIDENTIAL MANUFACTURED HOME PARK A summary of the methods used by the City of Edmonton in determining the value of multi-residential manufactured home park land properties
More informationHampton 6 Unit Hampton st Scranton, Pa 18504
Property Report Hampton 6 Unit Presented by: Ron J. Parasole Jr. 1738 Brick ave Scranton, Pa 18508 Office: Mobile: (570) 903-8969 Fax: (570) 209-7753 www.realestatetools.com 2010-2014 Real Estate Tools
More informationHow to Read a Real Estate Appraisal Report
How to Read a Real Estate Appraisal Report Much of the private, corporate and public wealth of the world consists of real estate. The magnitude of this fundamental resource creates a need for informed
More informationCalifornia Real Estate License Exam Prep: Unlocking the DRE Salesperson and Broker Exam 4th Edition
California Real Estate License Exam Prep: Unlocking the DRE Salesperson and Broker Exam 4th Edition ANSWER SHEET INSTRUCTIONS: The exam consists of multiple choice questions. Multiple choice questions
More informationDemystifying Rental Underwriting. August 15, 2017
Demystifying Rental Underwriting August 15, 2017 Welcome & Introductions Delivered by Steve Lathom, TDA Consulting www.tdainc.org slathom@tdainc.org 517-203-4130 Session Objectives Regulatory issues driving
More informationTHE PROSPECTIVE MARKET VALUE OF THE SUBJECT PROPERTY (7 TH FLOOR FULLY FINISHED), AS OF MARCH 1, 2015, WILL BE: $25,000,000
CLIENT: Whiteman Osterman & Hanna LLP Attorneys at Law One Commerce Plaza Albany, New York 12260 Attention: Mr. John L. Allen, Esquire APPRAISER: Michael Gluc, MAI President, Principal Appraiser NEAC FILE
More informationFollowing is an example of an income and expense benchmark worksheet:
After analyzing income and expense information and establishing typical rents and expenses, apply benchmarks and base standards to the reappraisal area. Following is an example of an income and expense
More informationPresented by: Sheraton Gateway Hotel Los Angeles
..!Oi...... 11 " It.... ' "' ' e one May 9, 2011 Sheraton Gateway Hotel Los Angeles Presented by: Suzanne Mellen, MAl, CRE, FRICS, ISHC Senior Managing Director Hotel and Casino Consulting and Valuation
More informationDefinitions. CPI is a lease in which base rent is adjusted based on changes in a consumer price index.
Annualized Rental Income is rental revenue under our leases on Operating Properties on a straight-line basis, which includes the effect of rent escalations and any tenant concessions, such as free rent,
More informationRevised Seller/Servicer Guide Chapter 12 Multifamily Appraisals. Martin A. Skolnik, MAI (Marty) Director, Multifamily Appraisals
Revised Seller/Servicer Guide Chapter 12 Multifamily Appraisals Martin A. Skolnik, MAI (Marty) Director, Multifamily Appraisals June 26, 2014 Multifamily Real Estate Valuation at Freddie Mac Freddie Mac
More informationMarina 89 Proforma (HUD loan)
For more information contact: Broker chad@chadandersongroup.com John T Lewis Director of Development 253.678.1031 John@REISinvest.com Denny Anderson Co-Broker 253-720-8269 Denny@REISinvest.com Downtown
More informationLAPACO PAPER PRODUCTS LTD.
LAPACO PAPER PRODUCTS LTD. 5200 J.A. Bombardier Street Longueuil, Quebec TABLE OF CONTENTS Section Photographs & Location Maps 1 Project Summary 2 The Location 3 Lapaco Paper Products Ltd. 4 Investment
More informationReal Estate Finance and Development Syllabus
Real Estate Finance and Development Syllabus Course Description This course will provide participants with a general understanding of real estate finance and development with an emphasis on housing development
More information1ST AVENUE TOWNHOMES
1ST AVENUE TOWNHOMES 3783 1st Avenue San Diego, CA 92103 For more information contact: #01824454 PROPERTY HIGHLIGHTS Heart of Hillcrest Location 93 Walk Score! Significant Rental Upside All ~1,200 SqFt
More informationBayview Apartments. 470 Central Ave Alameda, CA Unit Apartment Building On Alameda Island Rarely Available Waterfront Property
For more information contact: Apartment / Investment Broker michael@svmultifamily.com BRE 01327546 33 Unit Apartment Building On Alameda Island Rarely Available Waterfront Property Views of The San Francisco
More informationESOP Feasibility and Valuation Basics
ESOP Feasibility and Valuation Basics Ohio Employee Ownership Center Akron/Fairlawn Hilton Fairlawn, Ohio April 21, 2006 Richard A. Schlueter rschlueter@comstockvaluation.com C VA 1 Levee Way, Suite 3109
More information400 Central Avenue St. Petersburg, Florida 33701
Broker Opinion of Value March 2016 400 Central Avenue St. Petersburg, Florida 33701 PRESENTED BY: PREPARED FOR: John Gerlach, CCIM Vice President Investment Services DIRECT: +1 727 442 7184 EMAIL: John.Gerlach@Colliers.com
More informationRaising Your Commercial IQ
Raising Your Commercial IQ Real Estate Investment & Lease Analysis January 2013 0 P age Neil Osborne M.B.A. DL. (604) 988-5518 nosborne@investitsoftware.com Investit Software Inc. Toll free 877-878-1828
More informationInvestment Terms. Glossary
Investment Terms Glossary DOOR Industry term used instead of Unit. T 12 Trailing 12 P&L (Profit & Loss). T 3 Trailing 3 P&L (Profit & Loss). PRO FORMA/UNDERWRITING Industry term referring to financially
More informationDi Fiore Fourplex. 859 Di Fiore Dr San Jose, CA Offering Price: $1,550,000
For more information contact: Commercial Investment Broker michael@svmultifamily.com BRE 01327546 Offering Price: $1,550,000 Unit Mix: (1) 3BR / 2BA, (1) 2BR / 1BA, (2) 1BR / 1BA 2 Parking Spaces per unit
More informationHow to Determine the Value of a Storage Property from Financial Reports. Presented by: Joe Linsalata
How to Determine the Value of a Storage Property from Financial Reports Presented by: Joe Linsalata Building your Proforma Use an Excel spreadsheet or an equivalent Always use formulas, stay away from
More informationTenant: Law Firm 4 NAICS: Primary Industry: Offices of lawyers
Tenant: Law Firm 4 NAICS: 541110 Primary Industry: Offices of lawyers Date: 05.25.17 Table of Contents Law Firm 4 132 Main Street TABLE OF CONTENTS TIL Score Executive Summary Tenant Score Information
More information8 Units in Salinas. 539 Terrace Dr Salinas, CA List Price: $750,000
For more information contact: Apartment / Investment Broker michael@svmultifamily.com BRE 01327546 List Price: $750,000 Property Refurbished in 2006 with Numerous Upgrades: Roof, plumbing, kitchens, bathrooms,
More informationInvesco Real Estate Acquisitions
Acquisitions With the corporate office centrally located in Dallas, Texas and regional acquisitions offices in New York, San Francisco and Orange County, Invesco is able to effectively source acquisition
More informationInvesting in Income Properties
Investing in Income Properties 2 nd Edition Kenneth D. Rosen Introduction... 1 Part One The Basics... 3 Chapter 1 Why Commercial Real Estate?... 5 Learning Objectives... 5 Introduction... 5 Real Value,
More informationGreenwich - For Sale
Greenwich - For Sale PROMINENT RETAIL / COMMERCIAL BUILDING * * POTENTIAL RESIDENTIAL CONVERSION * * 406 EAST PUTNAM AVENUE (US Rte 1) Greenwich (Cos Cob), CT Prominent Route 1 frontage Convenient Cos
More informationProfessional Certification Programs
Professional Certification Programs Participants in NDC training, including staff members of Housing and Economic Development Networks, State and Local Governments, Community Development Banks and Charitable
More informationFOR SALE Investment Property near Cal Poly
FOR SALE Investment Property near Cal Poly STEVEN R. BATTAGLIA 805.688.5333 steve@battagliare.com License #01318215 284 E Foothill Blvd San Luis Obispo, CA Investment property near Cal Poly. Older residential
More informationAn Introduction to RPX INTRODUCTION
An Introduction to RPX INTRODUCTION Radar Logic is a real estate information company based in New York. We convert public residential closing data into information about the state and prospects for the
More informationAnalyzing the Impact of the Financial Crisis on LIHTC Property Values. National Council of Affordable Housing Marketing Analysts November 9, 2009
Analyzing the Impact of the Financial Crisis on LIHTC Property Values National Council of Affordable Housing Marketing Analysts November 9, 2009 David Fournier dfournier@arausa.com THE CLIFF Total Apartments
More informationFLORIDA BROKER PRELICENSE (FREC II) (V2)
FLORIDA BROKER PRELICENSE (FREC II) (V2) TIME CONTENT OUTLINE LEARNING OBJECTIVES -- After this segment, the Licensing 7 hours 45 mins. License Law and Rules 1 explain the purpose of the license law describe
More informationCRE Proforma Development Project Summary of Before Tax Cash Flows by Year
CRE Proforma Development Project Input Data Marginal Tax Bracket 25.0% Mortgage LTV 75% Developer Cost of Carry 15.0% Depn Recovery Rate 20.0% Amort Term (Years) 30 Going Out Cap Rate 9.0% Capital Gain
More informationBefore the Minnesota Public Utilities Commission State of Minnesota. Docket No. E002/GR Exhibit (LMC-1) Property Taxes
Direct Testimony and Schedules Leanna M. Chapman Before the Minnesota Public Utilities Commission State of Minnesota In the Matter of the Application of Northern States Power Company for Authority to Increase
More informationThe survey also examines the underlying causes of FVM and impairment audit
Acuitas, Inc. s Survey of Fair Value Audit April 20122 Executive Summary Public Company Accounting Oversight Board (PCAOB) inspections have noted a dramatic increase in the number of fair value measurement
More informationMG Architects Kimberley Lane Houston, TX For more information contact: Ryan Hartsell Partner
For more information contact: Partner rhartsell@oxfordcres.com Phone: (713) 647-6400 2900 Weslayan St., Suite 480 Houston, TX 77027 www.oxfordcres.com Table of Contents Real Estate Investment Details...
More informationTurnkey Cash Flow th St W Bradenton, FL For more information contact: Nataliia Musick
For more information contact: nataliiamusick@gmail.com TURNKEY CASH FLOW, Presented by New Shores Real Estate, LLC Price: $749,900 TURNKEY CASH FLOW! Charming 9-unit apartment complex in the heart of Bradenton,
More informationValue Fluctuations in a Real Estate Investment Financed with Debt
Working Draft of New Case Study 4A Value Fluctuations in a Real Estate Investment Financed with Debt (which will be added to AICPA Accounting and Valuation Guide Valuation of Portfolio Company Investments
More information6 APARTMENTS LARGE 2 & 3 BEDROOMS
6 APARTMENTS LARGE 2 & 3 BEDROOMS R O B 25-30% RENTAL UPSIDE GREAT CONDITION N X Presented Exclusively By OMORRISON PROPERTIES SOUNDVIEW AREA 0 VIOLATIONS 100% COLLECTIONS LOW RENTS IMMEDIATE UPSIDE MANY
More informationNA Calculations Manual
NA Calculations Manual ARGUS Developer 8.0 November 2017 ARGUS Software An Altus Group Company 0 2017 ARGUS Software, Inc. NA Calculations Manual for ARGUS Developer 8.0 November 2017 Published by: ARGUS
More informationHousing as an Investment Greater Toronto Area
Housing as an Investment Greater Toronto Area Completed by: Will Dunning Inc. For: Trinity Diversified North America Limited February 2009 Housing as an Investment Greater Toronto Area Overview We are
More informationTable of Contents SECTION 1. Overview... ix. Course Schedule... xiii. Introduction. Part 1. Introduction to the Income Capitalization Approach
Table of Contents Overview... ix Course Schedule... xiii SECTION 1 Introduction Part 1. Introduction to the Income Capitalization Approach Preview Part 1... 1 Market Value... 3 Anticipation and Other Relevant
More informationBegin with the End in Mind
Begin with the End in Mind Len Jones, DVM CEO & Founder Nations fastest growing veterinary brokerage Total Prac*ce Solu*ons Group is na*onal brokerage company, made up of veterinarians, a
More information