BIWS | Real Estate Financial Modeling Mastery

real estate financial modeling

Real Estate Financial Modeling 2.0 teaches you how to master the questions and case studies you’ll need to win offers at the top real estate private equity firms, brokerages, development firms, and investment banks. Two topics matter more than anything else in any real estate interview: (1) Your interest in real estate and knowledge of the industry. (2) Your ability to answer technical questions competently, complete modeling tests, and prove that you can do the work.

Real Estate Financial Modeling Module 1

In this module, you will get an introduction to Real Estate Financial Modeling, and you’ll practice key skills with short case studies/modeling tests across the main property and deal types. Then, you’ll move into the real estate investment trust (REIT) lessons and learn how accounting, the financial statements, and valuation all differ.

These case studies are all short (30, 60, or 90 minutes) so you can get results and practice your financial modeling skills without needlessly complicated models or documents. If you have limited time to prepare, you can complete this module in a weekend and feel confident and prepared for your interview by Monday morning.

Real Estate Financial Modeling Module 2

In this module, you will complete a 4-hour real estate development modeling test for an office property in the City of London (100 Bishopsgate). You will expand on the simplified 90-minute version in the introductory module and build in support for a monthly schedule with flexible refinancing and exit dates and multiple scenarios.

You will also add support for tenants with different lease types, calculate returns to both equity and mezzanine investors, build a mixed IRR/multiple-based waterfall schedule, and add support for the Lookback Provision using VBA code. Finally, you’ll answer the case study questions, make an investment recommendation for each investor group, quantify the risk factors, and explain how to mitigate the main risks.

Real Estate Financial Modeling Module 3

In this case study, you’ll complete a 2-hour hotel acquisition and renovation modeling test based on a 5-star resort in Dubai, the Jumeirah Beach Hotel.

You’ll start by setting up assumptions for different market and operational scenarios, including Base, Upside, and Downside cases and Independent vs. Franchise cases, and you’ll use them to build a Pro-Forma for the property. Then, you’ll set up the acquisition, exit, and financing assumptions, project the Debt service, calculate returns to equity investors, and set up sensitivity tables to analyze the deal outcome under varied assumptions. Finally, you’ll make an investment recommendation, identify the key risk factors and explain how to mitigate them, and comment on the Independent vs. Franchise choice and the terms of the Permanent Loans.

Real Estate Financial Modeling Module 4

In this case study, you will build a multifamily acquisition and credit analysis model and make an investment recommendation on the Senior Loan, Mezzanine, or Preferred Equity used to fund the property.

You’ll start by building a standard Pro-Forma for The Lyric, a 234-unit multifamily property in Seattle, and you’ll add support for the acquisition, exit, and debt service, as well as the equity returns calculations. Then, you’ll calculate the returns and recovery percentages for the lender groups in different scenarios and exit dates, and you’ll create sensitivities to further “stress test” the deal. Finally, you will build a DCF to value the property, evaluate comparable properties and a Replacement Cost analysis, and answer case study questions about the debt and equity, the operating assumptions, the risk factors, and the valuation.

Real Estate Financial Modeling Module 5

In this case study, you will build an acquisition and renovation model for a mixed-use office/retail property and make investment recommendations for the Limited Partners, General Partners, Senior Lenders, and Mezzanine Investors.

You’ll start by setting up the transaction assumptions for 45 Milk Street, a 61,000-square-foot property in Boston, and then you’ll build a monthly and annual Pro-Forma that supports different lease types, start dates, and expiration dates, including Percentage Rent leases. Then, you’ll project the Debt Service, including a TI/LC/CapEx Holdback released on a monthly basis, and you’ll calculate the returns to each investor and lender group. In the Waterfall Returns Schedule, you will build in support for Preferred and Catch-Up Returns, and you’ll create sensitivity tables to analyze different outcomes. Finally, you’ll use the model to make an investment recommendation for each group and explain how to mitigate the risk factors – or, for negative recommendations, what must change for the deal to work.

Real Estate Financial Modeling Module 6

In this case study, you will build a condo development model for the Heritage Cyrela, a super-high-end luxury complex in São Paulo. You will then use the model to make investment recommendations for the Limited Partners and Developers and identify the key risk factors in the deal.

You’ll start by setting up the transaction assumptions and the construction timeline, including the monthly pre-sales of condo units in each phase and the start and end of the construction period. Then, you’ll project Gross Sales based on initial, construction-end, and final deposits, and you’ll forecast the Hard Costs, Soft Costs, FF&E and Move-In Costs, and Land Acquisition Costs. You’ll use this monthly cash flow model to project Equity and Debt draws, interest, and principal repayment, and then you’ll build a Waterfall Returns Schedule with a Preferred Return, Catch-Up Return, and tiers based on a mix of IRRs and equity multiples. Finally, you’ll create an annual summary, Sources & Uses schedule, and sensitivity tables to summarize everything and answer the case study questions.

Real Estate Financial Modeling Module 7

In this case study, you will build a 3-statement model and valuation for AvalonBay, a leading U.S.-based multifamily REIT. You will then use the model to create a hedge fund/asset management stock pitch, an equity research report, and an investment banking pitch book for the company.

You’ll start by projecting the company’s developments, redevelopments, acquisitions, dispositions, and unconsolidated real estate (equity investments), and you will use these segment-level projections to build a 3-statement projection model. Then, you will value the company using a Net Asset Value (NAV) Model, Comparable Public Companies and Precedent Transactions, and a Discounted Cash Flow (DCF) Analysis based on a 10-year projection period. You’ll also get practice finding the data and adjusting the numbers based on disclosures in SEC filings.

You’ll then summarize the results of this valuation and use it to outline a stock pitch for the company, including the investment thesis, catalysts, risk factors, and ways to hedge against the main risks. Finally, you’ll tweak this pitch to create an equity research report and an investment banking pitch book with a debt vs. equity recommendation for the company’s financing requirements. If you complete only the model here, it’s a 4-hour case study. If you also draft the stock pitch and the other documents for a more in-depth exercise, it’s closer to a 1-week case study.

Real Estate Financial Modeling Module 8

In this case study, you’ll project the performance of individual properties for SPH REIT, a Singaporean retail REIT, on a half-year basis, and you’ll create a 3-statement model that supports the S$ 500 million acquisition of Seletar Mall, a new property, using Equity and Debt.

You will create Base, Downside, and Extreme Downside Cases based on market data, and you’ll use the different Rental Reversions, NPI Margins, and Cap Rates in those cases to assess the company’s credit stats and ratios (Gearing, Debt / EBITDA, EBITDA / Interest, and others). Then, you’ll try different combinations of Debt and Equity until you find one that allows the company to achieve its targeted metrics and ratios (Distribution Yield > 5%, DPU Accretion >= 0%, Gearing <= 35%, and Interest Coverage >= 5.0x) across all the cases.

Finally, you’ll answer case study questions at the end, present your recommendation, explain the key risk factors and how to mitigate them, and examine other ways the company could change its capital structure to meet its targets.

Real Estate Financial Modeling Module 9

In this case study, you’ll complete a quarterly merger model and supplemental analysis for Digital Realty’s $5.8 billion acquisition of DuPont Fabros, and you’ll learn how purchase price allocation and the combination of the financial statements differ for REITs.

You’ll start by reviewing each company’s standalone quarterly projections and NAV models, and then you’ll set up the transaction assumptions, including the Sources & Uses and Purchase Price Allocation schedules, including new items such as Above- and Below-Market Lease Intangibles. Then, you’ll combine and project the financial statements, calculate key metrics such as accretion/dilution for FFO and AFFO per unit & share, and analyze the credit profile of the combined entity.

Since most REIT M&A deals are 100% stock, the Contribution Analysis and Value Creation Analysis are especially important; you’ll complete both here and use them to draw conclusions about the deal terms, the seller’s valuation, and the potential risk factors in the deal. Finally, you’ll answer the case study questions at the end, make a recommendation for or against the deal, and see how you might present your findings in a short presentation as well.

Real Estate Financial Modeling Module 10

In this case study, you’ll analyze Blackstone’s $2.5 billion CAD leveraged buyout of Pure Industrial Real Estate Trust (PIRET) in Canada and make an investment recommendation for or against the deal. You’ll start by learning about the key differences in REIT leveraged buyouts, and then you’ll set up the transaction assumptions, scenarios and drivers for the REIT’s same-store, acquisition, development, and disposition activity, and the full financial statement projections.

Then, you’ll add the Debt Schedule, examine the credit stats and ratios, and calculate the returns to all investor groups, including a management rollover, options pool, and multiple-based incentive fee for Ivanhoé Cambridge (the other equity investor in the deal). Finally, you’ll set up sensitivity tables and use them to answer the case study questions and make an investment recommendation. The final, optional lesson will show you how to draft a 10-slide presentation with your findings.

Real Estate Financial Modeling Module 11

In this final module for real estate modeling, you can test your knowledge of the course material with a 60-question certification quiz testing all the topics and case studies above. These questions are challenging, so you will almost certainly need to attempt this quiz multiple times to pass it. You can review your incorrect answers and go back to review the appropriate material, as needed.

Once you pass the quiz with a score of at least 90%, you will receive a Certificate that you can add to your resume/CV and LinkedIn profile..

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