School of Real Estate Finance & Investment

5 days 24-28 Apr 2017, London UK £4,895.00 + VAT* Download brochure Add to basket
5 days 17-21 Jul 2017, New York United States $5,415.00 Download brochure Add to basket
5 days 10-14 Sep 2017, Dubai UAE £4,595.00 Download brochure Add to basket
5 days 9-13 Oct 2017, Hong Kong Hong Kong $6,800.00 Download brochure Add to basket
5 days 4-8 Dec 2017, Paris France 6,020.00 + VAT* Download brochure Add to basket

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Overview

A 5-day practical programme with case studies and integrated cash flow modelling for analysts, investors, financiers, developers and advisors.

Featuring: 

  • Property performance measurement and analysis
  • Evidence of cycles in property markets
  • Developing cash flow models
  • Investors' approach to different types of property vehicle
  • Core vs. developing vs. emerging markets
  • Sector analysis: office vs. retail vs. leisure
  • Calculating EVA and residual income
  • Corporate finance decisions and real estate
  • Lease/buy leaseback/structured leaseback decisions
  • Single asset returns in a portfolio context
  • Tactical and strategic asset allocation
  • Impact of gearing and debt finance

Course level

This course is aimed at people with several years' real estate development strategy or finance/investment experience. The course puts participants on a steep learning curve, hence the fundamentals of each subject will be covered rapidly before moving onto more complex areas.

Delegates are required to bring their own laptop equipped with Excel 2007 or above and USB port.

Course background

Real Estate continues to attract the attention of funds, banks, corporates and investors looking for diversification and liability matching. However, cross border investment and financing brings risks as well as opportunities. This advanced programme is designed as an integrated series of modules which will increase participants’ understanding of today’s complex and sophisticated process of real estate investment and finance. In addition to expert course tuition, delegates will benefit from a collegial atmosphere, with networking and information-sharing a valuable part of the course.

The programme’s main objective is to give a thorough understanding of the most popular financing and investing structures, as well as the latest thinking in analytical techniques, in a changing capital markets context. Participants will consider frameworks for decision rules on major capital expenditure commitments in public and private real estate markets, both at the asset and portfolio level.

The recognition and analysis of risk will be a component part of the programme. The programme covers many techniques and tools that can be applied to dealing with and resolving practical, everyday problems. An intermediate level programme covering:

  • Investment cash flow analysis
  • Public and private real estate vehicles
  • Debt and equity securitisation and investment strategy
  • Corporate real estate finance and structured leasebacks
  • Risk analysis, simulation and real options pricing
  • Putting investment into a portfolio context
  • Use of debt in a real estate investment context

Who should attend

  • Investors
  • Analysts
  • Lending and Project Finance Bankers
  • Financiers
  • Developers
  • Advisors

Whilst its focus is primarily on European markets, the techniques and trends studied will also be of use to participants investing in property markets in other regions.

Instructors

We work with a series of expert instructors, please select the course location of interest to review the credentials of who will be delivering the programme.

Paris
Bill Rodney

The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in development, cash flow analysis and corporate real estate and business strategy and trends impacting the real estate industry.

He has advised on funding and development strategies in Europe, Africa, Asia and Australia as well as having extensive teaching experience in the UK, Hong Kong and Malaysia.

His teaching experience has covered specialist Real Estate Investment & Finance Masters and MBA programmes and he runs training courses globally for banks, investment managers, corporate advisory teams, legal firms and public sector clients. Topics covered combine spreadsheet modelling for debt / equity structuring, development appraisals and finance, investment analysis, risk, simulation and portfolio modelling, leases and option pricing, corporate finance models. He combines extensive practical experience with a strong academic background. This enables him to relate theory to practical applications.

He is a Registered CPD Presenter - verifying a proven track record in training, lecturing and enhancing skills and knowledge in specialist technical areas with an established practical experience background.

The instructor holds MSc in Real Estate Investment & Finance from City University, London where he subsequently became Head of Department. He retains a part-time position as Senior Lecturer in the Faulty of Finance, Cass Business School, teaching on specialist Masters courses and postgraduate programmes.

Hong Kong
Bill Rodney

The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in development, cash flow analysis and corporate real estate and business strategy and trends impacting the real estate industry.

He has advised on funding and development strategies in Europe, Africa, Asia and Australia as well as having extensive teaching experience in the UK, Hong Kong and Malaysia.

His teaching experience has covered specialist Real Estate Investment & Finance Masters and MBA programmes and he runs training courses globally for banks, investment managers, corporate advisory teams, legal firms and public sector clients. Topics covered combine spreadsheet modelling for debt / equity structuring, development appraisals and finance, investment analysis, risk, simulation and portfolio modelling, leases and option pricing, corporate finance models. He combines extensive practical experience with a strong academic background. This enables him to relate theory to practical applications.

He is a Registered CPD Presenter - verifying a proven track record in training, lecturing and enhancing skills and knowledge in specialist technical areas with an established practical experience background.

The instructor holds MSc in Real Estate Investment & Finance from City University, London where he subsequently became Head of Department. He retains a part-time position as Senior Lecturer in the Faulty of Finance, Cass Business School, teaching on specialist Masters courses and postgraduate programmes.

New York
Bill Rodney

The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in development, cash flow analysis and corporate real estate and business strategy and trends impacting the real estate industry.

He has advised on funding and development strategies in Europe, Africa, Asia and Australia as well as having extensive teaching experience in the UK, Hong Kong and Malaysia.

His teaching experience has covered specialist Real Estate Investment & Finance Masters and MBA programmes and he runs training courses globally for banks, investment managers, corporate advisory teams, legal firms and public sector clients. Topics covered combine spreadsheet modelling for debt / equity structuring, development appraisals and finance, investment analysis, risk, simulation and portfolio modelling, leases and option pricing, corporate finance models. He combines extensive practical experience with a strong academic background. This enables him to relate theory to practical applications.

He is a Registered CPD Presenter - verifying a proven track record in training, lecturing and enhancing skills and knowledge in specialist technical areas with an established practical experience background.

The instructor holds MSc in Real Estate Investment & Finance from City University, London where he subsequently became Head of Department. He retains a part-time position as Senior Lecturer in the Faulty of Finance, Cass Business School, teaching on specialist Masters courses and postgraduate programmes.

London
Bill Rodney

The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in development, cash flow analysis and corporate real estate and business strategy and trends impacting the real estate industry.

He has advised on funding and development strategies in Europe, Africa, Asia and Australia as well as having extensive teaching experience in the UK, Hong Kong and Malaysia.

His teaching experience has covered specialist Real Estate Investment & Finance Masters and MBA programmes and he runs training courses globally for banks, investment managers, corporate advisory teams, legal firms and public sector clients. Topics covered combine spreadsheet modelling for debt / equity structuring, development appraisals and finance, investment analysis, risk, simulation and portfolio modelling, leases and option pricing, corporate finance models. He combines extensive practical experience with a strong academic background. This enables him to relate theory to practical applications.

He is a Registered CPD Presenter - verifying a proven track record in training, lecturing and enhancing skills and knowledge in specialist technical areas with an established practical experience background.

The instructor holds MSc in Real Estate Investment & Finance from City University, London where he subsequently became Head of Department. He retains a part-time position as Senior Lecturer in the Faulty of Finance, Cass Business School, teaching on specialist Masters courses and postgraduate programmes.

Dubai
Bill Rodney

The course director is a Chartered Surveyor whose career has spanned both private and public sector work, including large-scale development schemes, urban regeneration projects, project finance and Private Finance Initiatives (PFI). He has undertaken research and consultancy projects in development, cash flow analysis and corporate real estate and business strategy and trends impacting the real estate industry.

He has advised on funding and development strategies in Europe, Africa, Asia and Australia as well as having extensive teaching experience in the UK, Hong Kong and Malaysia.

His teaching experience has covered specialist Real Estate Investment & Finance Masters and MBA programmes and he runs training courses globally for banks, investment managers, corporate advisory teams, legal firms and public sector clients. Topics covered combine spreadsheet modelling for debt / equity structuring, development appraisals and finance, investment analysis, risk, simulation and portfolio modelling, leases and option pricing, corporate finance models. He combines extensive practical experience with a strong academic background. This enables him to relate theory to practical applications.

He is a Registered CPD Presenter - verifying a proven track record in training, lecturing and enhancing skills and knowledge in specialist technical areas with an established practical experience background.

The instructor holds MSc in Real Estate Investment & Finance from City University, London where he subsequently became Head of Department. He retains a part-time position as Senior Lecturer in the Faulty of Finance, Cass Business School, teaching on specialist Masters courses and postgraduate programmes.

Venue

London

Central London Hotel Venue

All courses are held at four or five star venues in Central London, Zone 1. We strive to provide you with a training environment of the highest quality, to ensure that the whole learning experience exceeds your expectations.

Your training venue will be confirmed by one of our course administrators approximately 3-4 weeks before the course start date.

New York

New York Hotel

This program takes place on a non-residential basis at a New York hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

As with all programmes on-site administrators are with you throughout the programme to ensure smooth administration and group interaction.

Dubai

Dubai Hotel

This programme takes place on a non-residential basis at a central Dubai hotel. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Dubai has an incredible number of hotels. Courses held here are mainly held at the J.W. Marriot hotel, Sheraton Dubai Creek and Le Meridien all in central Dubai.
 
J.W. Marriott Hotel – Abu Baker Al Siddique Road, PO Box 16590, Dubai, U.A.E
Phone +971 4 607 7811; Fax +971 4 607 7011
www.marriott.com
 
At the JW Marriott Dubai you will enjoy luxury on your terms; impeccable service and elegant surroundings allow you to relax and focus on your own agenda. With 344 luxuriously appointed rooms and suites the J.W. Marriott provides an oasis of calm in a busy city while the award-winning restaurants have the recipe for satisfying a taste for international flavour.        
 
Sheraton Dubai Creek – Baniyas Street, PO Box 4250, Dubai, U.A.E
Phone +971 4 228 1111; Fax +971 4 221 3468
www.starwoodhotels.com
 
After undergoing a complete renovation, the Sheraton Dubai Creek Hotel& Towers reopened October 10th, 2002 with a fully refurbished interior and exterior. The 255 room hotel now offers more creek-view rooms, redesigned atrium lobby, outstanding food and beverage facilities, upgraded rooms with state-of-the-art data connectivity, and Dubai's newest conference facilities. 

Le Meridien – PO Box 10001, Airport Road, Dubai, U.A.E
Phone +971 4 282 4040; Fax +971 4 282 5540
www.lemeridien-dubai.com
 
Le Meridien Dubai is a five star deluxe hotel built on two floors and surrounded by 38 acres of landscaped gardens. The hotel is elegantly furnished with a french accent that incorporates the individual character and flair of the local culture. The hotel is minutes away from the commercial districts and shopping centres and a short distance from Dubai International Airport. Facilities include a choice of 15 restaurants and bars, 24-hour room and laundry service, two fully equipped business centres and a state-of-the-art Spa and fitness club.

 
 

Hong Kong

4-5 Star Hotel in Hong Kong

All of our courses are held in 4 – 5 star hotels, chosen for their location, facilities and level of service. You can be assured of a comfortable, convenient learning environment throughout the duration of the course.

Due to the variation in delegate numbers, we will send confirmation of the venue to you approximately 2 weeks before the start of the course. Course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Paris

Centrally located hotel in Paris

This programme takes place on a non-residential basis at a hotel in central Paris. Non-residential course fees include training facilities, documentation, lunches and refreshments for the duration of the programme. Delegates are responsible for arranging their own accommodation, however, a list of convenient hotels (many at specially negotiated rates) is available upon registration.

Related Courses

Inhouse


 

Do you have five or more people interested in attending this course? Do you want to tailor it to meet your company's exact requirements? If you'd like to do either of these, we can bring this course to your company's office. You could even save up to 50% on the cost of sending delegates to a public course.

To find out more about running this course in-house:





Our Tailored Learning Offering

If you want to run this course at a location convenient to you or if you want a completely customised learning solution, we can help.

We produce learning solutions that are completely unique to your business. We'll guide you through the whole process, from the initial consultancy to evaluating the success of the full learning experience. Our learning specialists ensure you get the maximum return on your training investment.



We can offer any of our public courses delivered at your office or we can devise completely tailored solutions:


Read more about our offering or complete a call back request to speak to a learning specialist.

 

Agenda

Agendas are localised, please select your preferred location.

Day 1

Module 1: Real estate investment & finance


Introduction

  • Structure of Module 1
  • Delegates’ objectives

Real estate markets: macro View

  • Markets & sectors
    - Niche markets logistics, residential, retail & hospitality
    - Emerging markets & the importance of transparency
  • Property cycles: opportunities and threats. What to look for in different stages in the cycle.

Appraisal & valuation fundamentals
What should financiers and investors ask for? What should they look for? Worked examples

  • Terminology & techniques
  • Investment appraisal methods
    - Different methods for different assets & markets
    - Regulation & guidance
  • Types of income
  • How do lease terms affect value?
  • Slicing the income and converting to capital
  • Understanding yields and cap rates
    - Types of yield
    - Unbundling the all-risk yield
  • What are the key drivers of value?

Spreadsheet analysis: investment acquisition

  • Setting up, analysing and comparing different appraisal approaches including income capitalisation & depreciated replacement cost
  • Applying and adjusting cap rates and Income
  • Using different types of cap rates

Structuring the cash flow
How to structure, avoiding common mistakes. Investor approach -v- financier’s concerns. Worked examples and practical issues

  • Business plans
  • A Cash flow primer: typical patterns of cash flows
  • Discounted cash flow construction: key inputs, variables and outputs
  • Projecting rents, operating expenditure and cap rates
  • Lease roll-overs
  • Net operating income: A line by line assessment from gross to net income
  • Impact of depreciation & obsolescence 
  • Use of capital expenditure
  • The exit: when, why, how?
  • IRR & NPV: ratio analysis and diagnostics
  • Solving the maximum price to pay / target sale price 
     

Day 2

Spreadsheet analysis: Investment cash flow model

  • Setting out a dynamic cash flow. Shaping up the basic investment deal before finance
    - IRR, NPV, income and exit ratios. Assess uncertainty & the merits of the investment
    - Setting the target rate of return. What is an appropriate discount rate?
    - What else will show whether it is a good deal?
    - Considering the possible merits and limitations of the project
    - “What if” testing and adding sensitivity analysis

Sourcing product & asset management 

  • From sourcing to closing
  • Due diligence: identifying potential “red flags”
  • Asset management techniques
  • Adding and enhancing value
  • Leasing strategies

Case study: acquisition & due diligence process
Participants will work in small groups to analyse a case study that considers the acquisition of a mixed use investment and the appropriate due diligence processes.

Risk analysis in DCF appraisals

  • Risk identification & management techniques
  • Sensitivity analysis & data tables
  • Scenarios
  • Measuring risk
  • Simulation: pros & cons

Spreadsheet analysis: risk analysis in cash flow model

  • Testing the uncertainty in the project cash flow
    - “What-if” testing and adding sensitivity analysis
    - Scenarios & probability testing
    - Simulation: a practical technique?

Day 3

Structuring the finance
Gearing up an investment acquisition (use of leverage). Key financial covenants, sizing the debt, understanding risks, pricing and risk mitigation.

  • The quadrants of finance
    - Alternative opportunities to raise and structure finance
    - Corporate strategies
    - PropCo, OpCo and leasebacks
  • Returns on NOI and returns on equity
  • Typical financial covenants and points for negotiation
  • Different structures, including amortisation
  • Sizing the debt
  • Applying financial covenants to the cash flow
  • After debt cash flow & metrics
  • Profitability -v- financial risk
    - Identifying and quantifying the risks in the loan
  • Structuring for protection

Case study: Investment aquisition and finance
Financing a core investment acquisition. Participants will discuss terms for a loan for an investment opportunity. Examples of term sheets will be used to focus the discussion on suitable terms. On completion, a spreadsheet model will be used to illustrate the cash flow implications and key structuring issues.

Mezzanine and participating loans

  • Stretched debt to quasi equity
  • Structuring a package 
  •  Stand alone or blended?
  • Inter-creditor agreements
  • Lookback IRRs, warrants and convertibles
  • Worked examples

Spreadsheet analysis: Extending the cash flow model to add the finance

  • Analysing the impact of different levels of debt and equity in a cash flow context
  • Adding the senior debt tranche: analyse and adjust a geared cash flow model
  • Mezzanine finance: working through the capital stack including lookback and side by side participation in a risk return context, by adjusting key inputs to the model

Review of module and further reading & references


Day 4

Module 2: Real estate development & finance

 
Introduction

  • Structure of Module 2
  • Delegates’ objectives

Development market analysis

  • Data
  • Analysis
  • Trends & forecasts

Development appraisals & viability

  • Methods & approaches: From residuals to cash flows
  • Down to affordable land cost or profit
  • Line by line items
  • Ratio analysis: What indicates a viable project?
  • How is profit being generated?

Spreadsheet analysis: development appraisals
A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.

Cash flow appraisal techniques: moving from residuals to cash flow

  • Capital budgeting technique (NPV)
  • Discounted cash flow, accumulated cash flow and draw-downs
  • Structuring the cash flows
  • Analysing the outputs: IRR & NPV issues

Special topic: hotel development

  • Hotel segments
  • Feasibility
  • Financial viability 
  • Implementation
  • Marketing & operations
     

Day 5


Structuring the development finance

  • Pre-let or speculative?
  • Construction loan mechanics
  • Main Underwriting criteria
  • Project monitoring issues
  • Exit strategies 
  • Forward sale and full forward commitment
  • Matching the loan to the cash flows and the risks

Case study: Residential development finance
Participants will work in small groups to analyse a case study that considers the risk and return profile of a residential development and consider appropriate methods of finance.

Spreadsheet analysis: Development dinance
Spreadsheet models will be used to demonstrate the impact of finance on pre-let and speculative schemes. Debt and equity issues will be considered and analysed.

Joint ventures & private equity

  • Landowner & developer JVs
  • Traditional JVs and capital partners
  • Different structures for different players
  • Risk and return
  • Priority of distributions
  • Allocating risk & return
  • Prefs, promotes & waterfalls
  • Showing the exit and risk

Spreadsheet analysis: JVs & private equity
Spreadsheet models will be used to demonstrate the set-up of joint ventures, ground leases and private equity models. Delegates will test possible outcomes on the templates provided.

Review of module and further reading & references

Course summary and close


 

DAY 1


Real Estate Appraisal and Analysis

Overview
Structuring and developing flexible cash flow models for analysing real estate investments. At the end of this module participants should have an understanding of the component parts of a real estate cash flow model, the macro and micro influences and will have examined working spreadsheet models.

Appraisal & Valuation Fundamentals
What should financiers and investors ask for? What should they look for? Worked examples

  • Terminology & Techniques
  • Appraisal methods

                 - Different methods for different assets & markets
                 - Hard to Value assets
                 - Regulation & Guidance

  • Types of Income
  • How do lease terms affect value?
  • Understanding cap rates

                 - Types of yield
                 - Fundamental analysis

  •  What are the key drivers of value?

Structuring a Real Estate Cash Flow & Analysis
How to structure, avoiding common mistakes. Investor approach -v- Financier’s concerns. Worked examples and practical issues

  • Business Plans
  • A Cash Flow primer: typical patterns of cash flows
  • Discounted Cash Flow construction: Key inputs, variables and outputs
  • A line by line assessment down to Net Operating Income

                 - Projecting cash flows: expenses v growth
                 - Lease roll-overs & expiries

  • Use of Capital Expenditure
  • Property Cycles: opportunities and threats. What to look for in different stages in the cycle.
  • The Exit: When, Why, How?
  • IRR & NPV: Ratio Analysis and Diagnostics
  • Solving the maximum price to pay / target sale price


SPREADSHEET ANALYSIS: Investment Appraisal & Cash Flow Evaluation
Appraisal Methods
Discounted Cash Flow. Shaping up the basic Investment equity deal

  • IRR, NPV, Income and Exit ratios. Assess uncertainty & the merits of the investment
  • Setting the target rate of return. What is an appropriate discount rate?
  • What else will show whether it is a good deal?
  • “What if” testing and adding sensitivity analysis



DAY 2


Real Estate Acquisition, Management and Finance


Overview
Procedures for sourcing, closing and adding value will be covered as well as using the capital stack to finance the acquisition.
Spreadsheet concept models and interactive case studies will be used to illustrate various approaches, techniques and potential solutions.

Sourcing Product & Asset Management

  • From Sourcing to Closing
  • Due Diligence: Identifying potential “Red Flags”
  • Asset Management techniques
  • Adding and enhancing value
  • Leasing strategies

Structuring Property Investment Transactions
Types of Finance, their Impact on returns and key Lending Ratios, financial covenants, understanding risks, pricing and risk mitigation

  • Gearing up an investment acquisition (use of leverage)

               - Typical financial covenants and points for negotiation
               - Methods for sizing the debt
               - Applying financial covenants to the cash flow

  •  Mezzanine Finance

              - Stretched debt to quasi equity
              - Lookback IRRs, warrants and convertibles
              - Preferred equity

  • Optimising financial covenants & return on equity

Case study: Investment Acquisition and Finance
Impact of Leverage  & Use of Debt
Participants will discuss terms for financing for an investment opportunity.
Analysing the Operating Cash Flow and considering capital alternatives
A spreadsheet model will be used to illustrate the cash flow implications and key structuring issues.

 

Spreadsheet analysis: Extending the Cash flow Model
Adding senior debt & mezz tranches. Analyse & adjust a leveraged cash flow model
Use and application of Mezzanine Finance.
Different structures, such as Look Back and Side by Side participation



DAY 3

Property Investment Vehicles

Overview
Different types of investment instruments and structures are examined together with the way in which they are valued and traded.
The module includes an introductory study of indirect private and public real estate vehicles and their comparability to direct real estate  investment.

Types of Real Estate Vehicles and their Analysis

  • Investment Styles
  • Private v Public
  • Closed End v Open End
  • REITs & Real Estate  Companies


Case study: Net Asset Values (NAV) Exercise:
Analysis of a REIT. Based on its fundaments should it be trading at a discount or premium to NAV?
Issues with Real Estate appraisal or market sentiment?
Management styles & intangible franchise value
Public market valuations -v- real estate market valuations

Spreadsheet analysis: Calculating & Analysing Listed Vehicles
Components of NAV calculations & sensitivities of inputs
Alternative methods including FFO & AFFO
Is a publicly traded REIT or Real Estate  Company suitable for a Real Estate portfolio?


Private Equity Vehicles & Joint Ventures

  • Structure and Approach
  • Different structures for different players
  • Risk and return
  • Priority of distributions
  • Allocating risk & return
  • Prefs, Promotes & Waterfalls
  • Showing the Exit and risk


Spreadsheet analysis: Private Equity models
Spreadsheet models will be used to demonstrate the set-up of JVs and private equity structures. Delegates will test possible outcomes of changing pref / promote options on the templates provided.



DAY 4

 
Real Estate Development & Finance


Overview
This module considers identifying investment opportunities through development. It covers appraisal models and techniques for financing with debt and equity. Spreadsheet concept models and interactive case studies will be used to illustrate various approaches, techniques and potential solutions.
At the end of this module participants will be able to appreciate the risk elements in development and analyse ground up land development opportunities.

Development Appraisals & Viability

  • Methods & Approaches: From residuals to cash flows
  • Down to affordable land cost or profit
  • Line by line items
  • Ratio analysis: What indicates a viable project?
  • How is profit being generated?
  • Structuring the Cash Flows
  • Analysing the Outputs: IRR & NPV issues


Spreadsheet analysis: Development Appraisals
A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.

Structuring the Development Finance

  • Pre-let or speculative?
  • Construction loan mechanics
  • Main Underwriting Criteria
  • Project Monitoring issues
  • Exit strategies
  • 3rd Party Equity and JVs
  • Forward Sale and Full Forward commitments
  • Matching the loan to the cash flows and the risks


Spreadsheet analysis: Real Estate Development Finance
Spreadsheet models will be used to demonstrate the impact of finance on Pre-let and Speculative schemes. Debt and Equity issues will be considered and analysed.

Case study: Development and Finance project
Participants will work in small groups to analyse a case study that considers the strategic options, risk & potential returns of a development proposal and consider appropriate methods of raising & pricing the finance.



DAY 5



Real Estate Portfolio Analysis and Management

Overview
This module considers the ways that appraisal techniques may be adapted from single projects to portfolios. Portfolios for different types of players will be considered. Corporate real estate portfolio issues are also covered such as the factors that influence lease / buy decisions, and the scope for sale & leasebacks.
At the end of this module participants should be able to analyse portfolios, both from the investor and corporate’s point of view, as well as gaining insight to associated corporate finance and risk issues.

Real Estate Corporate Portfolios

  • Opportunities & Change
  • Accounting issues: Finance Lease or Operating Lease?
  • Buy or Lease decisions
  • Modelling and analysis examples

From Leasebacks to Structured Leasebacks

  • Releasing capital
  • Importance of Flexibility
  • Stages of development, change & different structures
  • Mini Case Studies

SPREADSHEET ANALYSIS: Portfolio Risk and Return
Participants will work in small groups to analyse real data to consider techniques that can be used to optimise the risk return characteristics of a real estate portfolio strategy.


Creating & Managing Investment Portfolios

  • Efficient portfolio construction
  • Comparative risk/return between Real Estate and other investments
  • Tactical and Strategic Asset Allocation Strategies;
  • Performance Measurement
  • Asset plans and Derivative strategies


Spreadsheet analysis: Asset Plans
Hold / Refinance /Renovate/ Sell analysis; Attributing performance; Incremental Cash Flow analysis & Risk webs.


Suggested Further Reading and References

 Course summary and close

Day 1

Module 1: Real estate investment & finance


Introduction

  • Structure of Module 1
  • Delegates’ objectives

Real estate markets: macro View

  • Markets & sectors
    - Niche markets logistics, residential, retail & hospitality
    - Emerging markets & the importance of transparency
  • Property cycles: opportunities and threats. What to look for in different stages in the cycle.

Appraisal & valuation fundamentals
What should financiers and investors ask for? What should they look for? Worked examples

  • Terminology & techniques
  • Investment appraisal methods
    - Different methods for different assets & markets
    - Regulation & guidance
  • Types of income
  • How do lease terms affect value?
  • Slicing the income and converting to capital
  • Understanding yields and cap rates
    - Types of yield
    - Unbundling the all-risk yield
  • What are the key drivers of value?

Spreadsheet analysis: investment acquisition

  • Setting up, analysing and comparing different appraisal approaches including income capitalisation & depreciated replacement cost
  • Applying and adjusting cap rates and Income
  • Using different types of cap rates

Structuring the cash flow
How to structure, avoiding common mistakes. Investor approach -v- financier’s concerns. Worked examples and practical issues

  • Business plans
  • A Cash flow primer: typical patterns of cash flows
  • Discounted cash flow construction: key inputs, variables and outputs
  • Projecting rents, operating expenditure and cap rates
  • Lease roll-overs
  • Net operating income: A line by line assessment from gross to net income
  • Impact of depreciation & obsolescence 
  • Use of capital expenditure
  • The exit: when, why, how?
  • IRR & NPV: ratio analysis and diagnostics
  • Solving the maximum price to pay / target sale price 
     

Day 2

Spreadsheet analysis: Investment cash flow model

  • Setting out a dynamic cash flow. Shaping up the basic investment deal before finance
    - IRR, NPV, income and exit ratios. Assess uncertainty & the merits of the investment
    - Setting the target rate of return. What is an appropriate discount rate?
    - What else will show whether it is a good deal?
    - Considering the possible merits and limitations of the project
    - “What if” testing and adding sensitivity analysis

Sourcing product & asset management 

  • From sourcing to closing
  • Due diligence: identifying potential “red flags”
  • Asset management techniques
  • Adding and enhancing value
  • Leasing strategies

Case study: acquisition & due diligence process
Participants will work in small groups to analyse a case study that considers the acquisition of a mixed use investment and the appropriate due diligence processes.

Risk analysis in DCF appraisals

  • Risk identification & management techniques
  • Sensitivity analysis & data tables
  • Scenarios
  • Measuring risk
  • Simulation: pros & cons

Spreadsheet analysis: risk analysis in cash flow model

  • Testing the uncertainty in the project cash flow
    - “What-if” testing and adding sensitivity analysis
    - Scenarios & probability testing
    - Simulation: a practical technique?

Day 3

Structuring the finance
Gearing up an investment acquisition (use of leverage). Key financial covenants, sizing the debt, understanding risks, pricing and risk mitigation.

  • The quadrants of finance
    - Alternative opportunities to raise and structure finance
    - Corporate strategies
    - PropCo, OpCo and leasebacks
  • Returns on NOI and returns on equity
  • Typical financial covenants and points for negotiation
  • Different structures, including amortisation
  • Sizing the debt
  • Applying financial covenants to the cash flow
  • After debt cash flow & metrics
  • Profitability -v- financial risk
    - Identifying and quantifying the risks in the loan
  • Structuring for protection

Case study: Investment aquisition and finance
Financing a core investment acquisition. Participants will discuss terms for a loan for an investment opportunity. Examples of term sheets will be used to focus the discussion on suitable terms. On completion, a spreadsheet model will be used to illustrate the cash flow implications and key structuring issues.

Mezzanine and participating loans

  • Stretched debt to quasi equity
  • Structuring a package 
  •  Stand alone or blended?
  • Inter-creditor agreements
  • Lookback IRRs, warrants and convertibles
  • Worked examples

Spreadsheet analysis: Extending the cash flow model to add the finance

  • Analysing the impact of different levels of debt and equity in a cash flow context
  • Adding the senior debt tranche: analyse and adjust a geared cash flow model
  • Mezzanine finance: working through the capital stack including lookback and side by side participation in a risk return context, by adjusting key inputs to the model

Review of module and further reading & references


Day 4

Module 2: Real estate development & finance

 
Introduction

  • Structure of Module 2
  • Delegates’ objectives

Development market analysis

  • Data
  • Analysis
  • Trends & forecasts

Development appraisals & viability

  • Methods & approaches: From residuals to cash flows
  • Down to affordable land cost or profit
  • Line by line items
  • Ratio analysis: What indicates a viable project?
  • How is profit being generated?

Spreadsheet analysis: development appraisals
A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.

Cash flow appraisal techniques: moving from residuals to cash flow

  • Capital budgeting technique (NPV)
  • Discounted cash flow, accumulated cash flow and draw-downs
  • Structuring the cash flows
  • Analysing the outputs: IRR & NPV issues

Special topic: hotel development

  • Hotel segments
  • Feasibility
  • Financial viability 
  • Implementation
  • Marketing & operations
     

Day 5


Structuring the development finance

  • Pre-let or speculative?
  • Construction loan mechanics
  • Main Underwriting criteria
  • Project monitoring issues
  • Exit strategies 
  • Forward sale and full forward commitment
  • Matching the loan to the cash flows and the risks

Case study: Residential development finance
Participants will work in small groups to analyse a case study that considers the risk and return profile of a residential development and consider appropriate methods of finance.

Spreadsheet analysis: Development dinance
Spreadsheet models will be used to demonstrate the impact of finance on pre-let and speculative schemes. Debt and equity issues will be considered and analysed.

Joint ventures & private equity

  • Landowner & developer JVs
  • Traditional JVs and capital partners
  • Different structures for different players
  • Risk and return
  • Priority of distributions
  • Allocating risk & return
  • Prefs, promotes & waterfalls
  • Showing the exit and risk

Spreadsheet analysis: JVs & private equity
Spreadsheet models will be used to demonstrate the set-up of joint ventures, ground leases and private equity models. Delegates will test possible outcomes on the templates provided.

Review of module and further reading & references

Course summary and close

Day 1

Module 1: Real estate investment & finance


Introduction

  • Structure of Module 1
  • Delegates’ objectives

Real estate markets: macro View

  • Markets & sectors
    - Niche markets logistics, residential, retail & hospitality
    - Emerging markets & the importance of transparency
  • Property cycles: opportunities and threats. What to look for in different stages in the cycle.

Appraisal & valuation fundamentals
What should financiers and investors ask for? What should they look for? Worked examples

  • Terminology & techniques
  • Investment appraisal methods
    - Different methods for different assets & markets
    - Regulation & guidance
  • Types of income
  • How do lease terms affect value?
  • Slicing the income and converting to capital
  • Understanding yields and cap rates
    - Types of yield
    - Unbundling the all-risk yield
  • What are the key drivers of value?

Spreadsheet analysis: investment acquisition

  • Setting up, analysing and comparing different appraisal approaches including income capitalisation & depreciated replacement cost
  • Applying and adjusting cap rates and Income
  • Using different types of cap rates

Structuring the cash flow
How to structure, avoiding common mistakes. Investor approach -v- financier’s concerns. Worked examples and practical issues

  • Business plans
  • A Cash flow primer: typical patterns of cash flows
  • Discounted cash flow construction: key inputs, variables and outputs
  • Projecting rents, operating expenditure and cap rates
  • Lease roll-overs
  • Net operating income: A line by line assessment from gross to net income
  • Impact of depreciation & obsolescence 
  • Use of capital expenditure
  • The exit: when, why, how?
  • IRR & NPV: ratio analysis and diagnostics
  • Solving the maximum price to pay / target sale price 
     

Day 2

Spreadsheet analysis: Investment cash flow model

  • Setting out a dynamic cash flow. Shaping up the basic investment deal before finance
    - IRR, NPV, income and exit ratios. Assess uncertainty & the merits of the investment
    - Setting the target rate of return. What is an appropriate discount rate?
    - What else will show whether it is a good deal?
    - Considering the possible merits and limitations of the project
    - “What if” testing and adding sensitivity analysis

Sourcing product & asset management 

  • From sourcing to closing
  • Due diligence: identifying potential “red flags”
  • Asset management techniques
  • Adding and enhancing value
  • Leasing strategies

Case study: acquisition & due diligence process
Participants will work in small groups to analyse a case study that considers the acquisition of a mixed use investment and the appropriate due diligence processes.

Risk analysis in DCF appraisals

  • Risk identification & management techniques
  • Sensitivity analysis & data tables
  • Scenarios
  • Measuring risk
  • Simulation: pros & cons

Spreadsheet analysis: risk analysis in cash flow model

  • Testing the uncertainty in the project cash flow
    - “What-if” testing and adding sensitivity analysis
    - Scenarios & probability testing
    - Simulation: a practical technique?

Day 3

Structuring the finance
Gearing up an investment acquisition (use of leverage). Key financial covenants, sizing the debt, understanding risks, pricing and risk mitigation.

  • The quadrants of finance
    - Alternative opportunities to raise and structure finance
    - Corporate strategies
    - PropCo, OpCo and leasebacks
  • Returns on NOI and returns on equity
  • Typical financial covenants and points for negotiation
  • Different structures, including amortisation
  • Sizing the debt
  • Applying financial covenants to the cash flow
  • After debt cash flow & metrics
  • Profitability -v- financial risk
    - Identifying and quantifying the risks in the loan
  • Structuring for protection

Case study: Investment aquisition and finance
Financing a core investment acquisition. Participants will discuss terms for a loan for an investment opportunity. Examples of term sheets will be used to focus the discussion on suitable terms. On completion, a spreadsheet model will be used to illustrate the cash flow implications and key structuring issues.

Mezzanine and participating loans

  • Stretched debt to quasi equity
  • Structuring a package 
  •  Stand alone or blended?
  • Inter-creditor agreements
  • Lookback IRRs, warrants and convertibles
  • Worked examples

Spreadsheet analysis: Extending the cash flow model to add the finance

  • Analysing the impact of different levels of debt and equity in a cash flow context
  • Adding the senior debt tranche: analyse and adjust a geared cash flow model
  • Mezzanine finance: working through the capital stack including lookback and side by side participation in a risk return context, by adjusting key inputs to the model

Review of module and further reading & references


Day 4

Module 2: Real estate development & finance

 
Introduction

  • Structure of Module 2
  • Delegates’ objectives

Development market analysis

  • Data
  • Analysis
  • Trends & forecasts

Development appraisals & viability

  • Methods & approaches: From residuals to cash flows
  • Down to affordable land cost or profit
  • Line by line items
  • Ratio analysis: What indicates a viable project?
  • How is profit being generated?

Spreadsheet analysis: development appraisals
A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.

Cash flow appraisal techniques: moving from residuals to cash flow

  • Capital budgeting technique (NPV)
  • Discounted cash flow, accumulated cash flow and draw-downs
  • Structuring the cash flows
  • Analysing the outputs: IRR & NPV issues

Special topic: hotel development

  • Hotel segments
  • Feasibility
  • Financial viability 
  • Implementation
  • Marketing & operations
     

Day 5


Structuring the development finance

  • Pre-let or speculative?
  • Construction loan mechanics
  • Main Underwriting criteria
  • Project monitoring issues
  • Exit strategies 
  • Forward sale and full forward commitment
  • Matching the loan to the cash flows and the risks

Case study: Residential development finance
Participants will work in small groups to analyse a case study that considers the risk and return profile of a residential development and consider appropriate methods of finance.

Spreadsheet analysis: Development dinance
Spreadsheet models will be used to demonstrate the impact of finance on pre-let and speculative schemes. Debt and equity issues will be considered and analysed.

Joint ventures & private equity

  • Landowner & developer JVs
  • Traditional JVs and capital partners
  • Different structures for different players
  • Risk and return
  • Priority of distributions
  • Allocating risk & return
  • Prefs, promotes & waterfalls
  • Showing the exit and risk

Spreadsheet analysis: JVs & private equity
Spreadsheet models will be used to demonstrate the set-up of joint ventures, ground leases and private equity models. Delegates will test possible outcomes on the templates provided.

Review of module and further reading & references

Course summary and close

Day 1

Module 1: Real estate investment & finance


Introduction

  • Structure of Module 1
  • Delegates’ objectives

Real estate markets: macro View

  • Markets & sectors
    - Niche markets logistics, residential, retail & hospitality
    - Emerging markets & the importance of transparency
  • Property cycles: opportunities and threats. What to look for in different stages in the cycle.

Appraisal & valuation fundamentals
What should financiers and investors ask for? What should they look for? Worked examples

  • Terminology & techniques
  • Investment appraisal methods
    - Different methods for different assets & markets
    - Regulation & guidance
  • Types of income
  • How do lease terms affect value?
  • Slicing the income and converting to capital
  • Understanding yields and cap rates
    - Types of yield
    - Unbundling the all-risk yield
  • What are the key drivers of value?

Spreadsheet analysis: investment acquisition

  • Setting up, analysing and comparing different appraisal approaches including income capitalisation & depreciated replacement cost
  • Applying and adjusting cap rates and Income
  • Using different types of cap rates

Structuring the cash flow
How to structure, avoiding common mistakes. Investor approach -v- financier’s concerns. Worked examples and practical issues

  • Business plans
  • A Cash flow primer: typical patterns of cash flows
  • Discounted cash flow construction: key inputs, variables and outputs
  • Projecting rents, operating expenditure and cap rates
  • Lease roll-overs
  • Net operating income: A line by line assessment from gross to net income
  • Impact of depreciation & obsolescence 
  • Use of capital expenditure
  • The exit: when, why, how?
  • IRR & NPV: ratio analysis and diagnostics
  • Solving the maximum price to pay / target sale price 
     

Day 2

Spreadsheet analysis: Investment cash flow model

  • Setting out a dynamic cash flow. Shaping up the basic investment deal before finance
    - IRR, NPV, income and exit ratios. Assess uncertainty & the merits of the investment
    - Setting the target rate of return. What is an appropriate discount rate?
    - What else will show whether it is a good deal?
    - Considering the possible merits and limitations of the project
    - “What if” testing and adding sensitivity analysis

Sourcing product & asset management 

  • From sourcing to closing
  • Due diligence: identifying potential “red flags”
  • Asset management techniques
  • Adding and enhancing value
  • Leasing strategies

Case study: acquisition & due diligence process
Participants will work in small groups to analyse a case study that considers the acquisition of a mixed use investment and the appropriate due diligence processes.

Risk analysis in DCF appraisals

  • Risk identification & management techniques
  • Sensitivity analysis & data tables
  • Scenarios
  • Measuring risk
  • Simulation: pros & cons

Spreadsheet analysis: risk analysis in cash flow model

  • Testing the uncertainty in the project cash flow
    - “What-if” testing and adding sensitivity analysis
    - Scenarios & probability testing
    - Simulation: a practical technique?

Day 3

Structuring the finance
Gearing up an investment acquisition (use of leverage). Key financial covenants, sizing the debt, understanding risks, pricing and risk mitigation.

  • The quadrants of finance
    - Alternative opportunities to raise and structure finance
    - Corporate strategies
    - PropCo, OpCo and leasebacks
  • Returns on NOI and returns on equity
  • Typical financial covenants and points for negotiation
  • Different structures, including amortisation
  • Sizing the debt
  • Applying financial covenants to the cash flow
  • After debt cash flow & metrics
  • Profitability -v- financial risk
    - Identifying and quantifying the risks in the loan
  • Structuring for protection

Case study: Investment aquisition and finance
Financing a core investment acquisition. Participants will discuss terms for a loan for an investment opportunity. Examples of term sheets will be used to focus the discussion on suitable terms. On completion, a spreadsheet model will be used to illustrate the cash flow implications and key structuring issues.

Mezzanine and participating loans

  • Stretched debt to quasi equity
  • Structuring a package 
  •  Stand alone or blended?
  • Inter-creditor agreements
  • Lookback IRRs, warrants and convertibles
  • Worked examples

Spreadsheet analysis: Extending the cash flow model to add the finance

  • Analysing the impact of different levels of debt and equity in a cash flow context
  • Adding the senior debt tranche: analyse and adjust a geared cash flow model
  • Mezzanine finance: working through the capital stack including lookback and side by side participation in a risk return context, by adjusting key inputs to the model

Review of module and further reading & references


Day 4

Module 2: Real estate development & finance

 
Introduction

  • Structure of Module 2
  • Delegates’ objectives

Development market analysis

  • Data
  • Analysis
  • Trends & forecasts

Development appraisals & viability

  • Methods & approaches: From residuals to cash flows
  • Down to affordable land cost or profit
  • Line by line items
  • Ratio analysis: What indicates a viable project?
  • How is profit being generated?

Spreadsheet analysis: development appraisals
A spreadsheet model will be used to demonstrate the set-up of development proposal. Ratio analysis & risk analysis techniques will be used to show the implications of changing market conditions.

Cash flow appraisal techniques: moving from residuals to cash flow

  • Capital budgeting technique (NPV)
  • Discounted cash flow, accumulated cash flow and draw-downs
  • Structuring the cash flows
  • Analysing the outputs: IRR & NPV issues

Special topic: hotel development

  • Hotel segments
  • Feasibility
  • Financial viability 
  • Implementation
  • Marketing & operations
     

Day 5


Structuring the development finance

  • Pre-let or speculative?
  • Construction loan mechanics
  • Main Underwriting criteria
  • Project monitoring issues
  • Exit strategies 
  • Forward sale and full forward commitment
  • Matching the loan to the cash flows and the risks

Case study: Residential development finance
Participants will work in small groups to analyse a case study that considers the risk and return profile of a residential development and consider appropriate methods of finance.

Spreadsheet analysis: Development dinance
Spreadsheet models will be used to demonstrate the impact of finance on pre-let and speculative schemes. Debt and equity issues will be considered and analysed.

Joint ventures & private equity

  • Landowner & developer JVs
  • Traditional JVs and capital partners
  • Different structures for different players
  • Risk and return
  • Priority of distributions
  • Allocating risk & return
  • Prefs, promotes & waterfalls
  • Showing the exit and risk

Spreadsheet analysis: JVs & private equity
Spreadsheet models will be used to demonstrate the set-up of joint ventures, ground leases and private equity models. Delegates will test possible outcomes on the templates provided.

Review of module and further reading & references

Course summary and close

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