Real Estate Investment Analysis and Financing

Introduction

Real Estate continues to attract the attention of funds, banks, corporations and investors looking for diversification and liability matching. However, cross border investment and financing brings risks as well as opportunities. This programme is designed as an integrated set of modules which will increase participants’ understanding of the complex and changing process of real estate investment, development and financing. In addition to expert course tuition, delegates will benefit from a collegial atmosphere, with networking and information-sharing. The modules are principally aimed at delegates with previous experience in investment/finance or development strategy, but as the course puts delegates on an interactive learning curve to cover fundamentals of each topic, before moving on to more advanced techniques and applications, it allows delegates from both a junior and more senior experience level to participate together. Articles, papers and further references are provided in the course. Delegates are required to bring their own laptop equipped with Excel 2013 or above and USB port for data and spreadsheet templates transfer. The programme’s key objective is to give a clear understanding of the most typical financing and investing structures, as well as the latest thinking in analytical techniques in a shifting capital markets context. Recognition and analysis of risk will be a component part of the programme. It covers several techniques and tools that can be applied to dealing with and resolving practical, everyday problems. This is a practical modular programme with case studies and integrated cash flow modelling for analysts, investors, financiers, developers and advisors.

Who should attend

• Structure of the Module
• Delegates’ objectives
• Property Cycles: opportunities and threats. What to look for in different stages in the cycle.
• Markets & Sectors: Traditional & Niche markets
• Emerging Markets & the Importance of Transparency
• Terminology & Techniques
• Appraisal methods
• Types of income
• Lease terms & impact on value
• Understanding yields and cap rates
• Unbundling the yield
• Key drivers of value?
• 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 up, lease expiries & roll-overs
• Net Operating Income: A line by line assessment from gross to net income
• Use of Capital Expenditure
• The Exit: When, Why, How?
• Ratio Analysis and Diagnostics
• Solving for the target rate of return
• 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
• From Sourcing to Closing
• Due Diligence: Identifying potential “Red Flags”
• Asset Management techniques
• Adding and enhancing value
• Leasing strategies
• What-if testing and adding sensitivity analysis
• Scenarios & Probability testing
• Simulation: A practical technique?
• Quadrants of Finance
• 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
• Lender Structuring for protection
• Stretched debt to quasi equity
• Structuring a package
• Stand alone or blended?
• Inter-creditor agreements
• Lookback IRRs, warrants and convertibles
• Worked examples
• Structure of the Module
• Delegates’ objectives
• Forms of Analysis
• Trends & Forecasts
• 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?
• Capital Budgeting Techniques in Development
• Discounted cash flow, Accumulated cash flow and Drawdowns
• Structuring the Cash Flows with phased/mixed use schemes
• Analysing the Outputs: What is appropriate & why?
• Pre-let or speculative?
• Construction loan mechanics
• Main Underwriting Criteria
• Project Monitoring issues
• Exit strategies
• Landowner & Developer JVs
• Traditional JVs and capital partners
• Different structures for different players
• Risk and return
• Priority of distributions
• Allocating risk & return
• Showing the Exit and risk

Course Content