CourseOutline:

ProjectFeasibilityAnalysis&Valuation

Theanticipatedscheduleforcoveringthecoursematerialisasfollows:

Week1ProjectFeasibilityAnalysis&ValuationOverview
Anoverviewofthecoursetopics&thepurposebehindinvestmentanalysiswillbethe
focus.
Week2AnalyzinganInvestmentOpportunity
Thefundamentalsoffinancialmodelingcanbeappliedtoanalyzeeverytypeofreal
estateproductacrossthebroadspectrumofrealestateinvestmentincludingcapital
improvements,landacquisitions,leaseholdinterests,buildtosuit(BTS)development&
speculativedevelopment.ThisweekwilladdressthequestionIstheprojectfinancially
viable&whatwillitbeworthtome,basedonmyintendedplans?.Examplesanalyzing
bothvalueaddopportunities(improvingexistingproperties)andnewconstruction
(development)willbeexamined.Alsodiscussedwillbeidentifyingthevariousparties
whowillanalyzeapotentialinvestment&theperspectivefromwhichtheinvestmentis
analyzedsuchasthebuyer,thelenderortheoutsideinvestor.
Week3AnatomyofaFinancialModel
Thetoolsforanalyzinganinvestmentwillbeconsidered&discussed.Financial
modelingwillbepresented,alongwiththedeterminantsforwhentoemployArgusvs.
Excel.Thecorecomponentsofafinancialmodelincome,expense&debtservicewillbe
highlighted,aswillanintroductiontodiscountrates,caprates,hurdlerates&profit
multiples.
Week4MarketAnalysis:UsingMarketMetricstoAnalyzeDemand
Howdoyouknowtheresmarketdemandforthespaceyoureconstructing?Theclass
willcoverthepurposebehindMarketStudieswhenplanningaproject.Whatarethe
demanddriversfordifferenttypesofspaceretail,office,medicaloffice,Understanding
thebasicmarketeconomicsthatdrivedemand&supply(competitivespace)provides
insightabouthowdevelopersforecastdemand/spaceneedswithinthecompetitive
universeofoptions.
Week5 ProjectingIncomePositiveCashFlows
Thisweekwillfocusonsettinguptherevenuesideoftheforecast.Thecomponentsof
incomeforaprojectwillbeexamined&explained.Incomeprojectionswillbedefined,
basedondifferingtypesofprojects.Settingassumptionsfortiming,includingwhen
incomecomesonline&absorptionrateswillbediscussed.


Week6ProjectingExpensesNegativeCashFlows
Theweekwillfocusonestablishingacostprofilefortheprojectimprovements&
understandinghowexpenselineitemsareforecasted.Usingdevelopmentbudget
estimates&interestexpenseforecasts,theclasswillworkthroughanexampleof
extractingbudgetedcostestimatesasinputsfortheanalysis.Othermechanicswillbe
discussedsuchasdiscountrates,interestrates&caprates.Studentswillformsmall
groupstobeginworkonatestcaseofafinancialfeasibilitymodel.
Week7CaseStudy:OHareAirportCollateralLandAnalysis
The class will focus on a case study of a financial feasibility analysis prepared for a
municipalclient,frombeginningtoend.
Week8PerformingSensitivityAnalyses
Thisclasswillcompletethecasestudyfromthepriorweek&alsoexploretheconcept
ofsensitivityanalysis.Examiningwhen&howtoemploysensitivityanalysis,theclass
willfocusontestingarangeofoutcomes,basedonalteringoneorseveralvariables.
Week9MethodsofValuingRealEstate&ValuationCaseStudy
Thevariousmethodsofvaluingdifferenttypesofcommercialrealestatewillbe
describedincludingmarketcomparison,replacementcost&incomecapitalization
approaches.Theuseofcaprateshowtheyreapplied&calculatedwillbediscussed&
theclasswillreviewarelatedcasestudythatilluminatesthevaluationprocess.
Week10StudentGroupsPresentTheirFeasibilityAnalysis