Financial Analysis of Development Projects (Site1)

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

January 8, 2015

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

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

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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.

January 15, 2015

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

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

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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.

January 22, 2015

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)

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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.

January 29, 2015

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)

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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.

February 5, 2015

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

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

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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.

February 12, 2015

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)

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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.

February 19, 2015

Accounting and Taxation issues for Real Estate Development Projects

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

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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.

February 26, 2015

Risk Management for Real Estate Development Projects

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

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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.

Education Credits

Education Credits

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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.

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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

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 confirmation. If you register via fax, mail or phone, the confirmation emails will be sent to you after your payment is received and processed. If you do not receive the confirmation emails within two weeks, please contact education@naiop.org.

Cancellation Policy

All cancellations must be in writing. Non-members substituting for members will pay the difference in fees. Please fax all cancellation/substitution notices to (703) 904-7003.

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 David at barbd@naiop.org for more information.