Expect a lively and engaging interactive classroom experience! Key topics will include:

• Establishing realistic financial objectives
• Identifying and calculating the primary components of return in income-producing real estate including cash flow, tax benefits, and futures
• Preparing operating and capital cost pro formas and sources and uses of funds statements
• Understanding debt-financing underwriting basics (net operating income, debt service coverage factors, annual constants, debt/equity ratios, and other lender underwriting requirements)
• Appreciating the importance of achieving positive financial leverage
• Calculating and interpreting standard industry measures of return:
  • Return on Total Asset Cost (Cap Rate)
  • Cash-on-Cash Return
  • Leveraged and unleveraged Net Present Value (NPV), and Internal Rate of Return (IRR)
  • Equity Multiples

Other topics will include preparing sensitivity analyses and understanding simple Waterfall/Promote structures (the priority and amount of cash flow distributions to the respective financial and operating partners in a real estate joint development or investment joint venture). We will teach and discuss these principles that are applicable worldwide using examples drawn from a wide variety of asset classes.

Via breakout groups, we will choose several possible properties from among those nominated by students, and build Sources and Uses of Funds using a simplified live Excel model that will enable the students to explore different approaches for closing the financing gap, or alternatively for coping with adversity that may arise during development.

• Identify the methodologies used to calculate the primary components of return in income-producing real estate.
• Establish reasonable financial return targets for each of these primary return components.
• Determine the level of debt financing that a project is likely to achieve based upon applicable underwriting criteria.
• Prepare simple operating pro forma, capital cost pro forma, and sources and uses of funds statements.
• Understand the most common real estate industry measures of return and the relative importance of each measure.
• Understand the significance of Purchase, Operating, and Exit Cap Rates.
• Understand a simple Waterfall/Promote structure.

• This program is intended for developers, architects, engineers, contractors, lenders, property managers, lawyers, brokers, investors, and other participants in the real estate development, investment, entitlement or regulatory process, including private, public, and NGO-sector players.
• This program is not designed for real estate professionals seeking an advanced real estate finance course. For experienced executives, please consider the Advanced Management Development Program.