Financial Analysis of Development Projects

Financial Analysis of the Development Process

Financial Analysis of Development Projects

The Financial Analysis of Development Projects course provides a combination of analytical theory and practical tools needed to evaluate the financial feasibility of complex value added and opportunistic real estate investments. This includes speculative land, land development, and commercial and residential rehabilitation and development for all property types: office, industrial, retail, multi-family and mixed-use. Accounting, risk management, taxation, capital markets and organizational issues influencing the financial viability of these real estate projects will also be considered and discussed. It is designed as an introductory to intermediate experience level course. Class sessions are primarily lecture type with substantial participation and discussion expected from the students. Outside speakers, group activities, case studies and exercises will be utilized to reinforce and apply the concepts. Assessments are designed in such a way as to measure student knowledge of content.

Lesson Plans

Module 1

Overview of the Real Estate Capital Markets: Investment Strategies, Return Measurement and Risk

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

In this session, we'll identify participants in the public and private real estate capital markets and examine the types of real estate financed by the real estate capital markets. Students will gain a comprehensive understanding of the sources and types of financing for real estate investments in addition to knowing the major indices which measure real estate investment returns and risk over time. We will identify the investment strategies followed by investors and the required rates of return for each these strategies. Students will learn to discern the components of the expected total return on a real estate investment. Lastly, we will view some of the industry data sources for cap rates and required returns and learn how to measure return on real estate investments. markets and examine the types of real estate financed by the real estate capital markets.

Students will gain a comprehensive understanding of the sources and types of financing for real estate investments in addition to knowing the major indices which measure real estate investment returns and risk over time. We will identify the investment strategies followed by investors and the required rates of return for each these strategies. Students will learn to discern the components of the expected total return on a real estate investment. Lastly, we will view some of the industry data sources for cap rates and required returns and learn how to measure return on real estate investments.

Facilitator for this Lesson:
Charles Schilke

Charles Schilke

Senior Lecture

The Edward St. John Real Estate Program

Subject Area:

Mr. Schilke’s areas of expertise include real estate transactions, landing and debt, real estate securitization, real estate private equity, real estate investment trusts, mergers, real estate financial and operational infrastructure, and large-scale real estate development; extensive high-level experience with office, retail, industrial, hotel, and multifamily properties

Module 2

Investment Analysis for Value-Added Properties: Case Study/Exercise 1: Office Project

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

Students will develop skills to identify and analyze value-added investment opportunities. In doing so, we will review key metrics, data points and structural issues used when evaluating value-added investments from both a debt and equity viewpoint.

Facilitator for this Lesson:
Charles Schilke

Charles Schilke

Senior Lecture

The Edward St. John Real Estate Program

Subject Area:

Mr. Schilke’s areas of expertise include real estate transactions, landing and debt, real estate securitization, real estate private equity, real estate investment trusts, mergers, real estate financial and operational infrastructure, and large-scale real estate development; extensive high-level experience with office, retail, industrial, hotel, and multifamily properties

Module 3

Investment Analysis for Development Transactions; Case Study/ Exercise 2: Industrial Project; Case Study/Exercise 3: Sale of a Residential Condo Project

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

This session will provide a thorough overview of financing and investing in development. We will discuss the complexities of valuing and assessing development projects and identify the differences between valuing a for-sale versus a for-rent development project. Students will learn how to deal with changes in project risk over time and how to determine the appropriate equity return for a development project. Finally, students will complete two case studies: one evaluating a for-rent development and the other a for-sale development.

Facilitator for this Lesson:
Dave Domres

Dave Domres, CPM, CCIM

Physicians Realty Trust.

Milwaukee, Wis.

Subject Area: Financial Analysis of Development Projects

In his 30 year career, David Domres CPM® CCIM has been involved in virtually every aspect of real estate investment, management and development in numerous capacities including Asset and Property Manager for office, medical, corporate, retail, industrial and multi-family properties.   Individual property portfolios have totalled more than 30 million square feet of commercial space and 5,000 apartment units. David is a Certified Property Manager®, Certified Commercial Investment Member and a frequent speaker, instructor and author on real estate strategy, investment, management, financial analysis and property performance.

David's extensive career experience includes service to individuals, corporations and full service real estate companies. David is well respected for his innovation, attention to detail, implementation and professionalism with asset, property and facility management, capital project planning and implementation, investment and leasing transactions, strategic planning and forecasting.  His passion goes beyond the workplace to support real estate in the community as the past President of numerous professional real estate associations including 2008 NAIOP Wisconsin Chapter President, NAIOP Corporate Board member from 2010 – 2012, 2013 NAIOP National Volunteer of the Year Award and being recognized three times as CPM of the Year by the Milwaukee Chapter of the Institute of Real Estate Management and 2012 IREM Professional Achievement Award.

Module 4

Financial Analysis of Mixed and Multi-Use Development; Case Study/Exercise 4: Mixed-Use Development Analysis (includes: retail, office and multifamily)

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

We will focus on financing and investing in a mixed-use development during this session. We'll discuss the complexities and nuances involved in mixed-use development projects and identify the factors that drive the phasing and inventory decision for a multi- or mixed-use investment. The session concludes with completion of a case study/exercise evaluating a mixed-use development.

Facilitator for this Lesson:
Don Logie

Don Logie

Senior Vice President, Development

Build Toronto, Inc.

Toronto, ON

Subject Area:

Don Logie is a senior real estate executive with extensive experience in the development and operation of commercial, industrial and residential real estate with particular emphasis on mixed-use developments. Don has been involved in the development of over 3,000 residential units and the asset management of over 20 million sq. ft. of retail and office developments.

As Senior Vice President, Development, Don is responsible for directing commercial and industrial development from identification of innovative and marketable concepts through the implementation phases of planning, marketing and construction.

In 2008 Don was Acting President & CEO as well as Vice President, Development for the City of Toronto Economic Development Corporation (TEDCO) overseeing the restructuring of City real estate and economic development functions into two new corporations.

Don is a member of the Professional Engineers of Ontario and of the International Conference of Shopping Centres. Don received his Bachelor of Applied Science in Civil Engineering from the University of Waterloo and his MBA, graduating on the Dean’s list, from the University of Toronto.

Module 5

Investment in Land for Future Development; Case Study/Exercise 5: Analysis of a Land Investment

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

We will focus on financing and investing in a mixed-use development during this session. We'll discuss the complexities and nuances involved in mixed-use development projects and identify the factors that drive the phasing and inventory decision for a multi- or mixed-use investment. The session concludes with completion of a case study/exercise evaluating a mixed-use development.

Facilitator for this Lesson:
Steve Schellenberg

Steve Schellenberg

Vice President

IMS Worldwide, Inc.

Webster, Texas

Subject Area:

Steve Schellenberg, Vice President of Business Development, IMS Worldwide, Inc. has been involved in logistics, manufacturing, distribution and transportation for over thirty years.  His experience includes managing all aspects of automotive supply chains, global distribution and third-party logistics.  He has extensive experience in the North America Free Trade Agreement trading regions and has managed air cargo, freight forwarding and air charter operations.

For the past ten years, he has conducted assessments of global supply chains and has performed evaluations related to supply chain security enhancements, supply chain custody and emerging Radio Frequency Identification systems to identify container location, status and condition.

Schellenberg has conducted significant port and infrastructure assessments related to logistics and industrial development opportunities and value.  He recently completed a comprehensive review of the Chinese Automobile Industry and has significant insights into their readiness to export vehicles to the U.S. market.  He has also authored numerous reports on how logistics and supply chain reconfigurations create industrial development value and opportunity.

Module 6

Real Estate Development Deal Structuring and Underwriting; Case Study/Exercise 6: Modeling Joint Venture and Partnership Profit Sharing and Partitioned Returns

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

In this session, we will examine the sources of equity financing and discuss the organizational forms and joint ventures for value added and opportunistic real estate investments. We will define terms associated with private equity arrangements and discuss the investment strategies pursued by private equity. Students will learn to analyze the fees structures of private equity investment vehicles and comprehend the workings of joint ventures, in addition to understanding common deal structures for private equity joint venture and partnerships with profit sharing and partitioned returns. We'll explore the commercial mortgage capital markets in terms of lenders, mortgage types and terms. We'll review the contents of a loan submission package and development and value-added loan underwriting guidelines and discuss how lenders make decisions on financing these properties. Finally, students will work through a case study/exercise detailing a private equity joint venture deal structure with profit sharing and partitioned returns.

Facilitator for this Lesson:
Jerry Franke

Jerry Franke

President

WISPARK LLC

Milwaukee, Wis.

Subject Area: Advanced Real Estate Finance, Financial Analysis of Development Projects

Jerold Franke was named president of WISPARK LLC., the real estate development subsidiary of Wisconsin Energy Corp., in August 2000. In this role, Franke has executive responsibility over the full-service, real estate development company that plans and constructs master-planned business parks in southeast Wisconsin and northeast Illinois.

Franke began his career with WISPARK in 1988 as director - Business Development. He quickly advanced to vice president in 1989 and was subsequently named senior vice president in 1998. Prior to joining WISPARK LLC., Franke was vice president for economic development of Forward Wisconsin, Inc., the state's economic development marketing organization from 1987 to 1988. Previously he was acting city manager and director of community development for the city of Janesville, Wisc., from 1980 to 1987.

Module 7

Accounting and Taxation issues for Real Estate Development Projects

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

This session will cover the various tax classifications and exemptions imposed on real estate in addition to addressing accounting and tax issues for development projects. We will explore affordable housing programs and discuss the Low Income Housing Tax Credit (LIHTC). Other tax incentives and programs that affect development will also be examined.

Facilitator for this Lesson:
Gregory Allen

Allen Gregory

Partner

Eide Bailly, LLP

Golden, Colorado

Subject Area:

Allen Gregory is a partner of Eide Bailly, a top 25 CPA firm. With 25+ years of public accounting experience, he provides tax planning from formation to liquidation with flow-through entity taxation, and specializes in evaluating fixed asset capitalization procedures through cost segregation studies for newly constructed, renovated and acquired real estate. Mr. Gregory received a bachelor’s degree in Business Administration from Kent State University and a Masters of Taxation from the University of Denver.

Module 8

Risk Management for Real Estate Development Projects

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

The final course session will focus on risk management. We will identify and pinpoint risk exposures during the development process as a problem to be solved with a risk management solution. Students will gain a better understanding of the principal risk exposures in real estate development and how to assess the risk exposure and identify the assumptions which must be made in the process of recommending a risk management solution. We will discuss the differences between insurable versus uninsurable risks and address how insurable risk exposures and theoretical concepts of risk affect insurance policy design, coverage and contractual provisions.

Facilitator for this Lesson:
Dave Domres

Dave Domres, CPM, CCIM

Physicians Realty Trust.

Milwaukee, Wis.

Subject Area: Financial Analysis of Development Projects

In his 30 year career, David Domres CPM® CCIM has been involved in virtually every aspect of real estate investment, management and development in numerous capacities including Asset and Property Manager for office, medical, corporate, retail, industrial and multi-family properties.   Individual property portfolios have totalled more than 30 million square feet of commercial space and 5,000 apartment units. David is a Certified Property Manager®, Certified Commercial Investment Member and a frequent speaker, instructor and author on real estate strategy, investment, management, financial analysis and property performance.

David's extensive career experience includes service to individuals, corporations and full service real estate companies. David is well respected for his innovation, attention to detail, implementation and professionalism with asset, property and facility management, capital project planning and implementation, investment and leasing transactions, strategic planning and forecasting.  His passion goes beyond the workplace to support real estate in the community as the past President of numerous professional real estate associations including 2008 NAIOP Wisconsin Chapter President, NAIOP Corporate Board member from 2010 – 2012, 2013 NAIOP National Volunteer of the Year Award and being recognized three times as CPM of the Year by the Milwaukee Chapter of the Institute of Real Estate Management and 2012 IREM Professional Achievement Award.

Education Credits

Education Credits

 center for education logo

Financial Analysis of Development Projects is approved for the following Education Credit:
16 hours credit toward either the Certificate of Advanced Study in Commercial Real Estate Development or the Certificate of Advanced Study in Real Estate Finance.

AIA Logo

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

Learning Objectives

Learning Objectives

  • Recognize the role of participants of the public and private real estate capital markets and define the types of real estate financed by the real estate capital markets.
  • Identify the sources and types of financing for real estate investments and apply the major indices which measure real estate investment returns and risk over time
  • Define the investment strategies followed by investors and the required rates of return for each these strategies and discern the components of the expected total return on a real estate investment
  • Know how to measure return on real estate investments
  • Understand the complexities of valuing and assessing development projects and learn the difference between valuing a for-sale vs. a for-rent development project
  • Learn how to deal with changes in project risk over time and determine the factors that drive the phasing and inventory decision for a multi- or mixed-use investment
  • Understand how land can be viewed as an option and how to use this to value land
  • Demonstrate knowledge of the various tax classifications and exemptions imposed on real estate
  • Determine how to assess the risk exposure and identify the assumptions which must be made in the process of recommending a risk management solution
  • Define terms associated with a private equity arrangements and understand the investment strategies pursued by private equity

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
  • Nonmember: $995
  • Developing Leader: $595
  • Student Member: $95
  • Student Nonmember: $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.

Cancellation Policy

All cancellations must be in writing. Cancellations of registrants received after December 16, 2015, will be charged a fee of $100 per attendee. Cancellations received after December 30, 20145 will forfeit the registration fee. No refunds will be made for no-shows. Substitutions are permitted until December 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 does tuition cover?

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

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.

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 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.

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.

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.

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 Parnarouskis at barbp@naiop.org for more information.