Real Estate Development Project Modeling

Description

This course reviews real estate project finance concepts and focuses on the skills required to design and create a model to help finance professionals evaluate a real estate development investment. In the course we review a case study for a mixed-use development project and examine concepts including model design, logic, project timing and various phases and various financing structures. Various intermediate and advanced Excel tools along with helpful keyboard shortcuts will also be covered throughout the course.

Prerequisites

Participants should have a basic working knowledge of Excel and the real estate sector prior to taking this course.

Time

8 - 16 hours, depending on the amount of material to be covered.

Learning Topics

Design and Structure a Real Estate Development Project Model

Design a clear and logical financial model
Lay out all necessary assumptions
Model various project phases
Use date functions and binary flags to manipulate model cash flows and flexibly manage timing in the model
Design a powerful scenario manager
Construct financial statements and necessary schedules
Calculate important metrics including Net Operating Income, Cash Flow for Debt Service, Levered and Unlevered Free Cash Flow

Incorporate Advanced Capital Structure Features

Layer in financing structure that includes a construction loan, revolving credit facility, mortgage, mezzanine debt and equity

Sensitize and Evaluate the Project

Explore model optimization and self-auditing techniques
Set-up financing sensitivity analysis – revenue reductions, cost overruns, interest rate risk, etc.
Incorporate and control model circularity
Incorporate a schedule to evaluate the project’s returns
Build a strong summary page to display the results