Virtual Classroom

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Who should attend the course?

  • Individuals – looking to move into the real estate industry
  • New hires – who have missed a joining company in-house program
  • Teams – employed in real estate investment roles with non-finance backgrounds
  • Graduates - preparing to interview for a finance related role in the real estate industry
  • Students – at business schools looking for a career in real estate finance
  • Investment bankers (real estate industry teams)
  • Real estate analysts
  • Buy side (principal investors
  • Anyone interested in real estate investments

Course details

Course Objectives

  • Learn all the financial concepts and ratios needed to analyse real estate investment and development proposals
  • Successfully implement valuation, investment and development frameworks
  • Acquire the ability to value a range of different types of properties
  • Appreciate how leases work and how they influence real estate valuation
  • Be able to integrate financial analysis with the other aspects of real estate development and investment
  • Understand taxes and fund structures for REITs and other indirect property investment internationally
  • Analyse, audit and build real estate models for both development and investment
  • Analyse risks for real estate development and investment and apply them to the models

Day 1 - Real Estate: Land, Development and Investment

  • The evolving Asset Classes
    • Land values, construction costs and land banking
    • International comparisons of prices, yields and other key data by sector
    • Evolving developer and investor strategies
  • Risk Analysis: what really matters
    • Political risk and how to manage it
    • Economic cycles and their impact on real estate markets: a detailed review
    • Climate change – effect on real estate
    • Cultural, organisation and social issues
    • New technology: Renewable energy, AI, robotics, smart construction, drones and DLT – what impact?
  • Market Analysis Considerations
    • How to forecast real estate markets
    • Comparables and how to analyse them
    • Regression/hedonic valuation models and how they work
  • Financing real estate development and investment
    • Amortisation, static, balloon and bullet structures compared
    • Global statistics
    • Bank lending criteria and calculation (DSCR, LLCR, ICR, LTV and LTC compared)
    • Syndication and the mortgage market
    • Lending practice and pitfalls
    • Mezzanine finance and deal structuring – cashflow waterfalls
    • Logic and use of Special Purpose Vehicles
    • Relative returns for structured real estate finance
    • Recent funding developments
    • Techniques of Islamic finance for real estate
    • Cost of capital issues for real estate companies (CAPM, betas, APT and alternatives)
  • Valuation of real estate
    • Appraisal of income property – RICS Valuation Practices and international comparisons
    • Comparison with land and residential real estate valuation techniques
    • Reporting according to IFRS standards
  • Financial Aspects of Development
    • Analysing Highest and Best Use studies and models
    • How to do a Feasibility Study
    • Feasibility Study examples
  • Leasing Analysis
    • Structure of leases e.g. length of the lease period; including options for tenant alterations and expansion, covenants, rent reviews, sinking funds
    • Lease Calculations (with worked examples and exercises)
    • Rent roll modelling, rent reviews and lease renewal options
  • Accounting Issues
    • Asset and liability valuations
    • Development vs Investment property in IFRS
    • Cash flows; depreciation; investment tax credits; after-tax cash flow;
  • Measuring Property Performance
    • Applicable concepts and methodologies
    • Sources of data and issues with performance evaluation
    • Current issues in performance measurement
  • Investment Portfolio Analysis
    • Comparison of risk–return profiles of real estate and financial investment assets
    • Measuring investment performance
    • The nature of risk and return from property compared with bonds and equities.
  • Ownership vehicles
    • Listed vs unlisted (private equity) property investment vehicles
    • Size and structure of the global REIT market
    • Benefits and risks of REIT investment

Day 2- Advanced modelling of real estate

  • Objectives and elements of real estate models
    • Structure of real estate model design: differences between development and investment models and how to combine them
    • Dealing with escalation/inflation
    • Monthly, quarterly and annual modelling
    • Debt Corkscrews for development (including milestone analysis)
    • Design, testing and feedback
    • Model sensitivity and auditing
    • Revenue and cost modelling
    • Cash adequacy, recourse, cash sweeps, standby and liquidity
    • Modelling financial coverage ratios and the bank perspective
    • Sales prices and taxes
    • Valuation techniques for real estate development models
  • Building a real estate model. Based on a real example, provided by an equity investor in a real estate transaction, delegates will build a real estate development and investment model. This will include:
    • Project Review
    • Analysing the inputs 
    • Costing construction
    • Dealing with input priorities
    • Data plausibility
    • Modelling loan drawdown 
    • Sales price projections and cap rates
    • Establishing value from a construct and sale transaction
    • Revising construction inputs
    • Loan assessment criteria
    • PGI, EGI and NOI in the model
    • Forecasting NOI and operating expenses
    • Modelling loan amortization and bullet payment [templates provided]
    • IRR NPV and other valuation analysis
    • Risk analysis
  • Risks and Real Estate
    • Applicable risks in real estate development and investment
    • Modelling and evaluating comparative risks
    • Risk management strategies
    • Available risk management instruments
    • Costs and benefits of risk management
    • Modelling risk management: sensitivity analysis, scenarios and Monte Carlo

""The virtual classroom was engaging and it felt like a classroom training"" ~ HR, International Investment Bank

What is a Virtual Classroom

Virtual Classroom training is a new and highly engaging way of delivering programs remotely with enhanced levels of interactivity compared to conventional webinars. In AMT’s Virtual Classroom participants are encouraged to activate their own webcams and mics throughout the class allowing for real-time engagement, both verbal and non-verbal, with fellow participants and their trainer. Participants can also share their screens to get instant assistance in any technical exercise; just like asking the trainer to walk over and help in the classroom! We have seen a step-change in participant engagement with this new technology. The trainer’s ability to see a selection of their participants’ faces in real-time, and to react to their verbal and non-verbal cues creates a remarkably realistic classroom-like experience. For an example of the technical requirements of for our Virtual Classrooms click here.

Prerequisite

We recommend delegates have a solid understanding of financial statement analysis (balance sheet, income statement and cash flow) and financial modeling skills.