Real Estate Finance and Investment

A huge amount of money has and will continue to be made in real estate investments. However, it is no secret that this industry has been hit hard by the global financial crisis and as a result it has become more and more difficult to maximise the opportunities out there. These challenges mean that real estate investment and financing has changed beyond recognition. Now, financing and investing in property is one of the most difficult games in town. Therefore it is crucial to keep up with the current market changes and challenges to ensure you can exploit the opportunities that are still out there.

This course has been designed to do help you do just that, providing a practical and comprehensiveintroduction to the subject. Drawing on the trainer’s global experience it provides you with a full background of the financial aspects of commercial and residential real estate in terms of how to calculate returns, how it is financed and how to analyse leases successfully, to invest and sell profitably.

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DAY ONE - MONEY AND PROPERTY

Discounted Cashflow Measurement for Real Estate

• Measuring real estate cashflow
• Forecasting
• Assessing Net Present Value
• Cost of capital issues for real estate companies
• Costs, taxes and inflation
• Capital budgeting and real estate

Case Study: Comparing cashflow from real estate and infrastructure investment projects

Exercises: Constructing Net Operating Income

Valuing Property Assets

• Site and building analysis
• The RICS guidelines methodology
• Changes and alterations in the Blue Book
• Fractional interests in land
• Alternative methodologies

Case Study: Valuing offices in different locations

Measuring Property Performance

• Applicable concepts and methodologies
• Problems and issues with performance evaluation
• Sources of data
• Evolution of data measurement
• International comparisons of performance
• Current issues in performance management

Case Study: Comparing the performance of different property sectors in a range of international markets

DAY TWO - FINANCING AND DEVELOPING PROPERTY

Mortgages and Bank Finance

• Concepts and applicability of the mortgage
• Global statistics
• Available types of mortgage
• The secondary mortgage market
• Lending practice and pitfalls
• Recent funding developments and constraints

Case Study: Structure and benefits of a range of mortgages compared

Financial Models for Real Estate Development and Investment

• Review of first-pass models
• Market studies and their use
• Highest and Best Use review
• Comparison with Argus and Estatemaster
• Feasibility Study review
• Analysis of investment and development financial models

Case Study: Analysing the financial structure of a real estate investment from A-Z

Legal Issues in Property Investment

• Major legal concepts in the acquisition, use, management, and transfer of real estate
• The question of title
• Title in secondary transactions
• Disclosure and governance in real estate acquisition and ownership
• Key case law internationally
• Current legal issues affecting the real estate industry

Case Study: Evaluation of legal issues in real estate investment transaction

Developing Property

• Essentials of property development
• The roles of individual professionals and their accountability
• Project feasibility, design and marketing
• Project financing and feasibility
• Scheduling and budget control
• Sales and profit margins

Case Study: Comparison of buy-to-let and buy-to-sell real estate returns

DAY THREE - INVESTING IN PROPERTY

Ownership Vehicles

• Listed real estate companies versus direct investment
• Investment funds and trusts
• Limited partnerships
• Performance drivers for listed real estate
• Securitisation of real estate – past, present and future
• Tax-free property vehicles in the UK market
• The global REITs market
• Indirect property in the UK market: listed real estate companies
• Prospects for REITs in the UK and elsewhere in Europe

Case Study: How have UK listed companies performed?

Risk and Real Estate

• Applicable risks in real estate investment
• Modelling and evaluating comparative risks
• Risk management strategies
• The index issue – the IPD and its expansion
• Available risk management instruments
• Costs and benefits of risk management
• Statistical evidence
• Emerging market issues

Case Study: Hedging price risk on commercial real estate – how have real estate derivatives fared?

Synthetic Property

• Replication of property performance
• Advantages and disadvantages of synthetic property investment
• The development of synthetic property
• Currently available instruments
• Future developments
• What is possible in Europe and emerging markets

Case Study: Synthetic property investment comparison with real estate

Portfolio Analysis

• Characteristics of an investment portfolio
• Measuring portfolio performance
• Value-at-Risk as applied to multi-asset portfolios
• Real estate in a balanced portfolio
• Empirical evidence on real estate investment
• Changes in portfolio structure worldwide

Case Study: Comparison of international portfolios with real estate components

By the end of this intensive course you will have the knowledge and skills to:

• Identify the distinct differences between real estate finance and corporate and project finance Understand all the complex financial, legal and technical terms and issues associated with real estate finance
• Appreciate the current state of real estate financing in the UK, Europe and worldwide
• Acquire practical real estate valuation techniques and investment appraisal methods
• Maximise indirect investment opportunities such as REITS and real estate derivatives
• Thoroughly understand estate financial models for construction and investment through extensive case studies and examples