Real Estate Modeling (REIT)

Ideal for investment banking, equity research professionals and real estate professionals with a focus on the REIT industry. You will build both financial and valuation models for an actual REIT from scratch, using a step-by-step approach. Along the way, we will demystify the REIT industry’s drivers, financial statements and corporate structure, and cover key concepts like FFO, AFFO, and CAD, and NAV.

Provider: Wall Street Prep
Difficulty: Very difficult
Rating: 4

What You Will Learn

In-depth REIT industry profile, drivers, terminology, tax advantages and structure (UPREIT’s and DOWNREIT’s), Segment-level modeling (same store properties, acquisitions, developments, and dispositions), REIT sector-specific drivers and forecasting best practices, Common REIT valuation approaches including Net Asset Value (NAV), comparable company and transaction analyses, and discounted cash flow (DCF) analysis, Modeling REIT-specific metrics and ratios – funds from operations (FFO) and adjusted funds from operations (AFFO / CAD)

Couse structure

REIT overview

  • Industry profile
  • Industry drivers and terminology
  • Tax advantages of REIT’s
  • REIT basics
  • The structure of REIT’s (UPREIT’s and DOWNREIT’s)

Modeling REIT financial statements

  • The financials of REIT’s as compared to other companies
  • Working with press releases, financial filings, and historical data
  • GAAP vs. Non-GAAP presentation of REIT financial data
  • Sector-specific  drivers and forecasting best practices
  • Forecasting Funds from operations (FFO), adjusted funds from operations (AFFO / CAD), Modeling same store properties
  • Impact of Modeling acquisitions, developments and dispositions on the three financial statements
  • Discontinued operations
  • REIT balance sheet forecasting Completed properties, CIP and land under development
  • Building a REIT cash flow statement

NAV modeling

  • Step-by-step modeling: Net Asset Value (NAV)
  • Common adjustments to NAV
  • Arriving at implied cap rates
  • Common NAV pitfalls and implicit assumptions

Additional recognition

This program is eligible for 35 PD credit hours as granted by CFA Institute.

Prerequisits

The course is self-paced and anyone is welcome to enroll. It does not assume a prior background in Real Estate Modeling. However, those who select this course should possess knowledge in:

  • Accounting: The program assumes a basic introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement). Students with no prior background in Accounting should take the Accounting Crash Course (included in this package).
  • Corporate Finance: Although general exposure to corporate finance is helpful, it is not required.
  • Excel: Basic introductory Excel knowledge is highly recommended. Students with limited or no experience using Excel should take the Excel Crash Course (included in this package)