Real Estate Acquisition Financial Modeling 

Key CRE Financial Modeling Topics: 

• Brief review of financial modeling Excel Best Practices including shortcut keys, formula construction, design, format, and formula auditing
• Compare and contrast different property types, their property cash flow characteristics, and review approximate cap rates
• Model gross and effective net revenue based on high-level growth assumptions and vacancy rates
• Build sources and uses of funds in the acquisition model for two different deal types: ‘Core+’ and ‘Value Add’ acquisitions
• Calculate purchase price and indicative cap rates including adjustments to NOI, the basis of the investment and corresponding effective cap rates (e.g., all-in vs. purchase price)
• Project leasing and capital costs (e.g., Tis, LCs and capex demands) with an emphasis on arriving at levered free cash flow
• Evaluate the nature of each deal type, business plan and future investment requirements
• Calculate IRRs and multiple time periods—both levered and unlevered
• Calculate NOI yield and cash-on-cash yields throughout the expected holding period and create summary output
• Calculate real estate-specific data tables including returning multiple outputs in the same data table (e.g., NOI multiple/cap rate)
• Introduce the concept of ‘front-loaded’ capex (e.g., through sources and uses) versus CapEx invested over time (via the cash flow statement) and implications for IRR calcs
• Summarize the output of the two deal types using self-referencing IF statements and compare-and-contrast different risk/reward parameters