Essentials of the Development Process

Essentials of the Development Process

This new introductory course examines the seven stages of a comprehensive real estate development model. With an emphasis on practical workplace applications, this course begins with raw land in the land banking stage and continues through land packaging, land development, building development, and building operations.

The real estate development model continues through the development process to include building renovations and property redevelopment. The life cycle of a real estate development is analyzed in terms of how value is created in each stage of development.

Session One presents the theoretical context of this seven stage model. Starting with Session Two, each successive session will examine each principle development stage by outlining how value is created, key players, critical tasks, controllable costs, and major risks. Examples discussed in each stage will describe how to apply those principles to real world practices.

Finally, a special skills section will be presented at the end of each module. These special skills will teach students how to perform basic calculations to estimate and analyze real estate values in order to better understand value creation throughout the real estate development process.

Lesson Plans

May 14, 2015

Overview of the Real Estate Development Process

Time: noon - 2 p.m. (Eastern Standard Time)

During this session, students will discuss what real estate developers are and what real estate developers do from several points of view. Students will also review various perspectives of real estate development from the writings of James A. Graaskamp. The discussion then moves to the seven-stage real estate development process using a schematic diagram, a box diagram, and a Venn diagram.

The seven stage model is combined with the eight required tasks for each stage to define the real estate “Development Matrix.” This 56-cell matrix is analyzed to demonstrate how real estate developers and real estate professionals interact throughout the life cycle of a real estate project. The students will expand this two-dimensional model to include property types and thereby define a three-dimensional real estate “Development Cube.” At the end of this module, students will have a working knowledge of the development matrix.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

May 21, 2015

Land Banking

Time: noon - 2 p.m. (Eastern Standard Time)

This session explores the first stage, Land Banking, in the real estate development process in terms of how value is created in this stage. Students will review the critical tasks, major risks, key players, and controllable costs of this stage. Students will learn to identify land bankers and understand the role of land banking in its relation to other stages. Students will learn to understand the varied nuances of the term “value” in real estate and the difference between market and investment value. This module also demonstrates the three variable Direct Capitalization Model and compares it to the more complex Discounted Cash Flow Model. This course will utilize the Direct Capitalization Models to calculate and compare values throughout the real estate development process.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

May 28, 2015

Land Packaging

Time: noon - 2 p.m. (Eastern Standard Time)

This session explores the second stage of the real estate development process, Land Packaging. Students will review the critical tasks, major risks, key players, and controllable costs of this stage. Students will identify the steps in the land packaging process and recognize the important roles of the numerous stakeholders required in this stage. Students will learn to calculate stabilized Net Operating Income (NOI) using gross income, vacancy & collections, and operating expenses. Students will also learn to estimate overall capitalization rates and understand the difference between market and investor’s rates. Estimating property value using the direct capitalization model will also be covered in this module.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

June 4, 2015

Land Development

Time: noon - 2 p.m. (Eastern Standard Time)

This session explores the Land Development stage. We will review the critical tasks, major risks, key players, and controllable costs of this stage. Students will learn how value is created through constructing infrastructure needed for future building development. In order to better understand the relationship between land developers and building developers, students will learn to estimate building development costs. The special skills section will continue with a review of how to calculate land value, using those cost estimates.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

June 18, 2015

Building Development

Time: noon - 2 p.m. (Eastern Standard Time)

This session explores the Building Development stage. We will review the critical tasks, major risks, key players, and controllable costs of this stage. The special skills section will focus on project feasibility by reviewing four components: 1) return on total costs compared to overall market capitalization rate 2) required spread as a measure of riskiness 3) the four step process to estimate a building developer’s justified land price 4) reviewing overall project feasibility with pessimistic, most likely, and optimistic outcome predictions.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

June 25, 2015

Building Operations

Time: noon - 2 p.m. (Eastern Standard Time)

This session explores the Building Operations stage. We will review the critical tasks, major risks, key players, and controllable costs of this stage. The special skills section will instruct students how to estimate property value using a mortgage-equity analysis. This will be broken into four parts. First, understanding how an underwriter may analyze a property’s value using debt-coverage ratio, land to value ratio, and borrower’s character. Second, how to estimate mortgage value in terms of annual debt payment and mortgage constant. Third, to estimate the equity value with the after financing cash flow and equity dividend rate. Finally, this session will conclude with estimating returns after financing.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

July 9, 2015

Building Renovation

Time: noon - 2 p.m. (Eastern Standard Time)

Add to Calendar 

This session explores the Building Renovation stage. We will review the critical tasks, major risks, key players, and controllable costs of this stage. Students will learn how renovation of a property may increase the value to better optimize the existing use. In order to better understand how this value is created, the special skills section will focus on estimating the building renovation costs and the coinciding property value after renovation. After a review of those components, we will then discuss how to determine if a renovation project is feasible using overall net disposition cap rate analysis.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

July 16, 2015

Property Redevelopment

Time: noon - 2 p.m. (Eastern Standard Time)

Add to Calendar 

This session explores the Property Redevelopment stage. We will review the critical tasks, major risks, key players, and controllable costs of this stage. This is the eighth stage of the real estate development process and completes the development cycle. To complement this stage, the special skills section focuses on the hold versus sell decision. This analysis uses the marginal rate of return and reinvestment rates, first examining how to estimate each, and then the comparison between the two in order to make the decision.

Facilitator for this Lesson:
Daniel Kohlhepp

Daniel B. Kohlhepp, PhD, MAI

Academic Director, Accelerated MSRE Program

The Johns Hopkins Carey Business School

Subject Area:

Daniel B. Kohlhepp, Ph.D. (Ohio State University) joined the Johns Hopkins Carey Business School in 2010. He is a Senior Lecturer in the Edward St John Real Estate Program with expertise in the areas of real estate development, investments, and valuation.

Education Credits

Education Credits

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Essentials of the Development Process is approved for the following Education Credit:
16 hours credit toward the Certificate of Advanced Study in Commercial Real Estate Development.

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15 AIA/CES Learning Units
16 Professional Development Hours (PDH)
1.6 Continuing Education Units (CEUs)

Learning Objectives

Learning Objectives

By the end of this course, students will be able to:

  • Define the seven stages of the real estate development process in terms of
    - How value is created
    - Key players
    - Critical Tasks
    - Controllable costs
    - Major Risks
  • Analyze one example of each stage
  • Estimate overall property value, land value, mortgage value, and equity value using direct capitalization methodology
  • Understand the relationships among value, income, and capitalization rates

Tuition & Register

Tuition & Register

Payment for a NAIOP online course entitles access for one person only to the course and all materials.

Course Tuition

  • Member: $795
  • Non-member: $995
  • Developing Leader: $595
  • Student Member: $95
  • Student Non-Member: $145

How to Register

Register online
Fax: Complete the PDF form and fax to 703-904-7003
Mail: Send check payments to: P.O. Box 333354, Chantilly, VA 20153
Register over the phone/questions: 800-666-6780

Confirmation

All registrations processed online receive an automatic order confirmation and receipt. If you register via fax, mail, or phone, a receipt must be requested by contacting education@naiop.org.

Login instructions to access the online course are sent under separate cover from customercare@gototraining.com, approximately 1 week before the first class. If it is less than one week until the start of the course and you have not received the login instructions, please check your spam folder. If the login email is still not there, please contact the NAIOP Education Department at education@naiop.org.

Cancellation Policy

All cancellations must be in writing. Cancellations of registrants received after July 22, 2015, will be charged a fee of $100 per attendee. Cancellations received after July 29, 2015 will forfeit the registration fee. No refunds will be made for no-shows. Substitutions are permitted until July 29, 2015. Nonmembers substituting for members will pay the difference in fees. Cancellation/substitution notices should be sent to education@naiop.org or faxed to 703-674-1471.

FAQs

FAQs

What are the computer requirements?

The interactive sessions will be accessed via GoToWebinar.com.

Please use the list below to determine if your computer meets the minimum requirements recommended to participate in the online courses:

To attend on a PC, the following is required:

  • Internet Explorer® 6.0 or newer, Mozilla® Firefox® 2.0 or newer (JavaScript™ and Java™ enabled)
  • Windows® 2000, XP, 2003 Server or Vista
  • Cable modem, DSL or better Internet connection
  • Minimum of Pentium® class 1GHz CPU with 512 MB of RAM (Recommended) (2 GB of RAM for Windows® Vista)

To attend on a Mac®, the following is required:

  • Mac OS X 10.4 (Tiger®) or newer
  • Safari 3.0 or newer, Firefox 2.0 or newer (JavaScript™ and Java™ enabled)
  • Cable modem, DSL or better Internet connection
  • Power PC G4/G5 or Intel processor (521 MB of RAM or better recommended)

Participants wishing to connect to audio using VoIP will need a fast Internet connection, a microphone and speakers (a USB headset is recommended).

Contact Barb David at barbd@naiop.org for more information.

Do I have to take an exam?

Course exams are not required unless you are enrolled as a candidate for the Certificate of Advanced Study in Commercial Real Estate or the Certificate of Advanced Study in Real Estate Finance.

Is there an online instructor?

Yes, there is a live instructor presenting each class. Students are able and encouraged to engage and interact with the instructor and each other.

What does tuition cover?

Payment for a NAIOP online course entitles access for one person only to the course and all materials.

What if I miss a scheduled class?

If a student misses a class, all materials and a recording of each class is posted in the material library for the student to review before the next class. A student must attend a minimum of 75 percent of the classes to receive credit.

What records are kept of my coursework?

The Center maintains records of all the coursework you complete, as well as optional exam scores, in a confidential transcript. Transcripts are available to candidates upon request. Please contact education@naiop.org.

How much out-of-class work is required for each course?

Courses offered online require no more than one hour per week of additional work outside of the scheduled class times.

What are the computer requirements?

The interactive sessions will be accessed via GoToWebinar.com.

Please use the list below to determine if your computer meets the minimum requirements recommended to participate in the online courses:

To attend on a PC, the following is required:

  • Internet Explorer® 6.0 or newer, Mozilla® Firefox® 2.0 or newer (JavaScript™ and Java™ enabled)
  • Windows® 2000, XP, 2003 Server or Vista
  • Cable modem, DSL or better Internet connection
  • Minimum of Pentium® class 1GHz CPU with 512 MB of RAM (Recommended) (2 GB of RAM for Windows® Vista)

To attend on a Mac®, the following is required:

  • Mac OS X 10.4 (Tiger®) or newer
  • Safari 3.0 or newer, Firefox 2.0 or newer (JavaScript™ and Java™ enabled)
  • Cable modem, DSL or better Internet connection
  • Power PC G4/G5 or Intel processor (521 MB of RAM or better recommended)

Participants wishing to connect to audio using VoIP will need a fast Internet connection, a microphone and speakers (a USB headset is recommended).

Contact Barb David at barbd@naiop.org for more information.