Basic Real Estate Finance: Understanding Your Proforma
June 1-2, 2009
Hilton Chicago O'Hare Airport
Chicago, Ill.
Basic Real Estate Finance is designed to provide students with the skills necessary to analyze the financial feasibility of real estate investment opportunities. It provides a step-by-step approach for completing a financial feasibility analysis. Students will become more familiar with real estate market participants, valuation fundamentals, determinates of real estate returns, the impact of leverage on real estate investments and interactions between the real estate space market and the capital market.
Course Learning Objectives Include:
- Defining "space markets" and "capital markets"
- Identifying the four quadrants of the capital market
- Developing an operating statement
- Understanding capitalization rates
- Differentiating capitalization rates from total yield
- Defining and calculating net present value (NPV)
- Defining and calculating unlevered internal rate of return (IRR)
- Differentiating between gross leases and net leases
- Incorporating tenant reimbursements into the operating statement
- Identifying the factors that cause capitalization rates and discount rates to change over time
- Identifying sources of discount rate and capitalization rate data
- Examining the relationship between leverage and risk
- Calculating loan payments and loan balance
- Incorporating debt financing into a proforma
- Estimating an appropriate levered discount rate using a leverage ratio
- Introducing key financial ratios including LTV, DCR and BER
- Examine the impact of prepayment on lender's yield and effective borrowing costs (EBC)
*Laptops are recommended for the Basic Real Estate Finance course. Please make sure your laptop battery is fully charged.
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