Would you ever use NAV to calculate the sale of a portfolio. I know you can use forward NOI divided by cap rate to calculate the price of assets, but would you ever need to calculate the debt in the process of valuing a portfolio. What if you were sell-side in the transaction?
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I don't understand the question...typically valuing a portfolio you determine the price based on the NOI and other factors. Debt is somewhat irrelevant as it's the seller's problem...unless you are assuming it...most deals are just free and clear.
are you talking about REIT's and using a equity NAV calculation? More details are needed here.
I meant if they assume the debt, which I know is rare. I put on my resume that I calculated the NAV of a portfolio to get the sales price, but I meant to saw that I calculated the forward cap rate (NOI*Cap Rate). I have an interview tomorrow and I am looking for ways to cover my ass.
I'm still not following the premise. I wouldnt say its rare for a NTREIT or any private/public RE strategy to use debt. low leverage is considered 10-30%...with most residential/MF around 60-70%.
If it's a valid experience then I wouldnt worry about covering your ass...just walk through the logic behind your decisions. MAke sure you understand it. a million ways to approach any deal...no single right answer...just ones that have a clear thought out process and logic.
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