Real Estate Development School

The Real Estate Development School is a five day course that focuses on both the theoretical and practical elements of Commercial Real Estate Development. The training starts with two days surrounding the theory of Real Estate development, this will provide delegates with a grounding of the subject matter. On day three the school will introduce Microsoft Excel and essential Real Estate Financial Modelling theory. On days four and five, the school will delve into practical Financial Modelling skills, focused on building a Development cash flow model.

This course will educate the delegate on Risk Management, Finance, Legal, Regulatory, Bureaucratic and Practical aspects of the Development process, to help provide the delegate with a full understanding of the Development lifecycle.

Upon completion of the course, you will have the expertise to confidently model Real Estate Development cash flows to a proficient level, empowering you to make informed financial decisions through your enhanced understanding of Real Estate Development in its entirety.

The Real Estate Development School combines three of our courses:

On this course you will…

Learn what constitutes Development physically and economically
Gain an insight into the Development Process at a Macro & Micro level
Recognise spreadsheet navigation and presentation tricks
Learn spreadsheet modelling best practice
Understand financial mathematics & conventional valuations
Develop proficiency in creating robust models
Construct a Development focused Financial Model starting from foundational principles
Analyse financial and project completion risks

Who will benefit from this School?

Real Estate Professionals who would like to update their skills in latest practices in Development
Professionals practicing in an associated field, Legal, Planning, Managing, Agency, Owners and Financiers
Graduates looking to work in corporate Real Estate development
Managers who would like to communicate more effectively with investors and owners during the formation phases of development
Real Estate professionals at any level with exposure to real estate financial models on a frequent basis
APC candidates
Mid-Senior professionals looking for a refresher on core model building skills and best practice

School Variations Available

Five Days – CRED, IREE & RED
Three Days – IREE & RED

Course Outline

Day One

Commercial Real Estate Developer

Why Develop?

The Real Estate Market System
Development Models
The Economics of Development

Who Develops?

Profiles of Developers
Risk and Rewards of different types of project
Who builds what and why?

What to Develop

Use looking for a site
Site looking for a use
Planning inputs

Feasibility

Best Use Value
Viability Assessments
Worth vs Value
Financing

Delivery

Evaluation
Market Analysis
Design Principals
Time line and risk profile

Day Two

Commercial Real Estate Developer

A Macro View

External influencers
Development pressure and prospects
Disposal of Development

Parties to Development & Agendas

Owners, Tenants, Public Sector
Development Team
Contractors
Agency

Day Three

Introduction to Real Estate in Excel

Spreadsheet modelling best practice

Modelling Life Cycle
Types of Model
Modelling Timescale

Financial mathematics

Introduction
Compound Growth
Present Values (PV)
Net Present Value (NPV)
Internal Rate of Return (IRR)

Conventional valuations

Introduction
Term & Reversion
Layer Method
Over Rented
Equivalent Yield

Real Estate cash flow models (Single-Let)

Introduction – Understanding UK Leases
Annual Discounted Cash Flows
- “What If” Analysis
Quarterly Discounted Cash Flow
Cash Flows with Rent Review
Multiple Rent Reviews
Pivot tables, V-Lookups, Data Tables and More…

Additional topics:

- IF & SUMIF
- Sensitivity Analysis: Data Table & Changing Calculation Options
- V-Lookups
- Pivot Tables

Day Four

Real Estate Developer

Learn how to build a discounted cash flow, analyse returns and understand the components of development models

Gross versus Net Yields, calculating Net Development Value (NDV)
Profit residual, with and without financing
Site residual, how to calculate profit without knowing your costs.
Introducing financing to site residual calculations
Purchase price and acquisition costs
Phased Sales, marketing and disposal costs
Modelling construction costs using straight line basis, fixed costs, variable costs, incidental costs and construction fees
Professional fees
Income and expenditure project functions
Logic functions, logic tables and array formula

Day Five

Real Estate Developer

Learn how to build a detailed property development project cash flow, add financing and perform risk analysis on commercial development projects

Multiple IRRs, competing projects, scoping and linear programming, maximising performance
Return metrics: Equity profit ratio (EPR), Costs paid out of proceeds (POP), Profit on cost ratio (PCR)
Alternative site calculation, Net present value (NPV)
Modelling construction costs using S-curve , variable costs, incidental costs and construction fees
Switching between scenarios
Introduction to Development financing, Pari Passu versus Equity First Financing
Debt scheduling: brought forward and carried forward method
Consideration of the impact of development finance interest, fees and covenants