analysis-real-estate-development-guatemala



Analysis of Real Estate Developments  

Assess, Analyze and Optimize Real Estate Development Opportunities

24-25 February 2025 in Guatemala

This intensive program has been formulated to provide real estate professionals involved in the development process, as well as those working with them in support functions, a truly comprehensive foundation to assess and value opportunities.

This program is ideal for real estate professionals and corporate executives including:

  • Real Estate Developers, Investors and Analysts
  • Urban Planners and Project Managers
  • Real Estate Planning and Strategy Professionals
  • Real Estate Finance and Accounting Professionals
  • Bankers, Lenders and Real Estate Fund Managers
  • Property Owners and Support Personnel
  • Gain a clear understanding of what drives the value of real estate development projects.
  • Quantify the dynamic risk profile of investments in development projects and contrast them with ownership of real estate assets.
  • Learn robust real estate analysis techniques for development projects.
  • Appreciate the multi-faceted skills and disciplines central to real estate development.
  • Understand how to strategically and financially analyze a real estate development proposal.
  • Identify flaws in commonly used approaches to the analysis of developments.
  • Acquire the insights and tools to robustly assess development projects.
Without a solid appreciation of underlying risk and return equation, evaluations of real estate developments can easily be flawed. Real estate development is significantly higher-risk than the ownership of real estate assets, particularly early in the development cycle. This distinction is commonly not fully understood and in nascent markets where newer players often are making the transition from ownership to development, this may comprise a larger proportion of the participants.

Real estate development is a multi-faceted enterprise; often each new development akin to creating a new company. As with a startup, from idea conception, market and product definition, to acquisition of resources, financing, construction, governance and marketing, all have to be put in place at the beginning before the venture becomes viable. Appreciation of urban economics that underlies real estate value is crucial in identifying and structuring profitable real estate development opportunities. A financial evaluation needs to be complemented by a thorough assessment of the entire process within the external context.

The course discusses real estate investment principles and practices with a particular focus on development activities. This requires a comprehensive understanding of both modern finance and economics, and the institutional features that differentiate real estate from other asset classes and markets.

1. Financial Principles for Real Estate Analysis

Drivers of value underlying real estate assets and developments.
Risk and return relationships for assets versus developments.
Quantifying value drivers using present value mathematics.
Simple models of real estate analysis using cash flow perpetuities.
Deconstructing capitalization rates.
Graaskamp model of real estate development.

2. Organizing and Analyzing Information

Accounting concepts of relevance in real estate.
Devising a real estate financial statement.
Components of a real estate setup.
Available sources of information.
Framework for real estate analysis.

3. Overview of Real Estate Valuation

Cash flow-based frameworks for real estate valuation.
Issues in projecting cash flows for real estate investments.
Identifying drivers in real estate market analysis.
Practical insight into discount rates.

4. Evaluating Development Projects

"Back of the envelope'' static analysis of real estate development projects.
View real estate property as the "end product" in development.
Phases in development.
NPV framework for development projects.
"Embedded" leverage in real estate developments.
Variation in risk across the development horizon.
Cost of capital for development projects.
Pitfalls using IRR in evaluating developments.
What to maximize: land value or developer profits.

5. Understanding Land Value

Land value in the context of urban economics.
Limitations of discounted cash flow based techniques in valuing land.
Development as an option in assessing land value.
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