Real Estate Modelling This course can also be presented in-house for your company or via live on-line webinar

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1 Real Estate Modelling This course can also be presented in-house for your company or via live on-line webinar The Banking and Corporate Finance Training Specialist

2 Course Overview Course Methodology This course will teach you all the available techniques and how to practically apply them through the use of Excel and Argus/Estatemaster. An extensive use of case studies will be adopted to illustrate the principles covered. Ultimately delegates will get practical tips on layout and style in building and analysing user-friendly models which are available as additional benefits Course of Overview the course. Who Should Attend This course is designed for delegates who are seeking to improve their technical real estate modelling skills in Excel. Bankers and financiers involved in real estate Directors and business development executives from corporates, equity sponsors and consultancies Course Content Day 1: Building Blocks of Real Estate Modelling 1. Using Excel for modelling Worksheet organization Data input, management and verification Use of colour/add-ins Naming of cells Location of input variables Review of Excel functions and their use Macros and their use Goal seeking Optimisation Circularity and how to resolve it Working with range names Graphs and charts What is needed from Excel and what is superfluous Principles of spreadsheets and workbooks Case Study: Evaluating good and bad Excel financial models 2. Equity valuation Equity NPV/ IRR and project IRR XNPV, XIRR, MIRR Modelling cash flow and ratios: Allowing for accountancy in real estate models: Depreciation Tax SPV accounting Capital allowances

3 Case Study: Valuation and Cash Flow models 3. Fundamentals of Real Estate Models Objectives of real estate models Structure of real estate model design Dealing with escalation/inflation Monthly, quarterly and annual modelling Design, testing and feedback Model sensitivity and auditing Revenue and cost modelling Cash adequacy, recourse, standby and liquidity Financial coverage ratios and the bank perspective What are the software choices for real estate development? Estatemaster vs Argus vs Excel Demonstrations: Argus/Estatemaster 4. Real Estate development modelling issues Architects, planners and real estate development Concept and objectives of Construct and Sell (CS) models Assumptions required for CS models Development cashflow corkscrews Sales prices and taxes Valuation and risk analysis of real estate development models Case Study: Examples of real estate development models 5. Real Estate investment modelling issues Limited recourse and loan terms and covenants in real estate lending Structuring and financing solutions Real estate investment finance experience worldwide Objectives of real estate investment models Buy and Let (BL) discounted cash flow modelling issues Risk analysis for real estate investment models Case Study: Review of several real estate investment models and their decisionmaking input 6. Building a Construct and Sell (CS) Model Based on a real example, provided by an equity investor in a real estate transaction, delegates will review and test a model for the transaction. The exercise will include: Project Review Analysing the inputs Costing construction Dealing with input priorities

4 Data plausibility Modelling loan drawdown Sales price projections and cap rates Establishing value from a construct and sale transaction Day 2: Building a Discounted Cash Flow Model (DCF) model Delegates will continue with the real example from Day 1 to construct a model based on the assumptions of construction, with revised assumptions, and leasing out. Revising construction inputs Loan assessment criteria PGI, EGI and NOI in the model Forecasting NOI and operating expenses Modelling loan amortization IRR NPV and other valuation analysis Monte Carlo and real estate modelling Methods of handling risk What is Monte Carlo analysis? Worked examples of Monte Carlo analysis Applying Crystal Ball to CS and CL Models Analysing the results Presentation of Monte Carlo results to senior management Course Conclusion

5 In-House Training Delivering this course in-house for a number of participants could be very cost effective. The venue and timing can be agreed to suit the client, as well as the selection of the trainer and the precise contents of the seminar. Tailored Learning All of our training courses can be tailored to suit your company s exact training needs. We will work closely with you to help develop a training programme with content that is unique for your organisation. Please us on enquiries@redcliffetraining.co.uk for more information E-Learning This course can also be presented as a bespoke e-learning programme created by you to fit your exact requirements.