Hi,
what are the main distressed real estate debt valuation methods?
I was thinking of
- liquidation method
- DCF
- anything else?
Thanks in advance
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errr...comps / cap rates ?
and what you intend to do on your liquidation if you don't know how to value to business, value each brick for scrap? land value (back to square one)?
+1 on this.. I think it would be interesting to learn about if anyone has some knowledge to drop.
Doesn't the valuation depend on the potential outcome? A debt for equtiy swap is just one outcome which would comprise a DCF or any other valuation of the properties (or portfolio) per se. Correct me if I am wrong.
Why would the capital structure alter the outcome of the DCF, assuming constant WACC? Note: we're valuing the asset, not the security here.
the topic actually is " Distressed Real Estate Debt Valuation Methods". I was thinking about valuing the security.
Valuing the asset is part of the valuing the security. for valuing the security, as said, I thought of: - DCF primarily - what about multiples (recent transactions) if available - what about cost approach?
Search "Modelling a Portfolio of Non-Performing Loans" in the search toolbar. Yes, modeling is spelled wrong.
You can't value the security if you don't value the asset. I mean cmon.
Use a DCF, stress vacancy/exit cap rate/discount rate/capex and see where you get comfortable; where is the margin of safety?
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