I am about to do valuation for a pitch to the principal shareholder of a listed real estate management company (sellside proposal). Since this will be based on public information only, I can't do anything too detailed (i.e. sum of the parts). On top of RE management, the company also does development and brokerage. Since this isn't valuation of a specific asset or property, I am thinking of doing a standard DCF, but since this is my first time dealing with this sector, any advice would be really appreciated. The projections for the development business seems to be the most difficult of the 3 businesses, due to its "flow-based" nature.
Also, the company has convertible preferred stock outstanding (out of the money) as well, so would the Cost of Preferred Stock be the dividend yield, weighted to the proportion of the sum of Debt/Equity/Pref. Stock, for WACC? The main problem with this is that the yield is based on an absolute value tied to LIBOR, so I was wondering if there are other methods.
Any advice on things to pay attention to for valuation of a RE management company would be really helpful. Thanks in advance.
