What are some things that most students forget in their real estate reports?

wasabiiitre's picture
Rank: King Kong | 1,614

Currently doing a case competition utilizing argus, have to analyze an asset within different market scenarios. We're writing up a report, of course we'll have the basics such as market research, cap rate, noi, IRR, etc. in our report.

What are some figures (whether it be about the market OR the asset) that students wouldn't think of to include? I'm looking to impress our judges with some research or statistic that only industry professionals would use or know about

Comments (9)

Feb 12, 2018

bumparoo

Feb 12, 2018

Really hard to say without knowing the competition format and various other details.

This case competition - is it meant to be framed as if the judges are investors? City officials?

Feb 12, 2018

Basically, retail class B small shopping centre.

Framed as "Investor Bob owns this shopping centre, what should he do", there's been a flood and an expected cost of $500k to fix everything, he's insurance ran out 1 month ago and he didn't renew as he was selling it soon. All repair cost outta pocket

Then it asks us for the best scenario to choose:

  1. Fix & Sell (financing the fix)
  2. Fix, Upgrade units, & Sell
  3. Sell as is (at discount)

Any interesting metrics pop out at you that we could use? Of course we have all the relevant information and assumptions for each scenario in order to make argus models

Feb 12, 2018

What asset class?

Here are some things to show:
Cash on cash - net cash flow as a % of invested capital
Are you assuming any leverage?
MOIC - Multiple of invested capital - total $s received/total put out
WDP - nominal $s above your investment
calculate how much of your nominal return is coming from CF vs cap rate compression (expansion)
Return sensitivities - data table showing IRR based on different cap rates, discount rates. You could do the same for certain growth rates ie rent growth @ different cap rates or sale dates
Run a downside cases - if this tenant blows out returns are still x

    • 1
Feb 12, 2018

Class B retail centre.

Thanks for the suggestions, I'll take a deeper look into each one

Feb 12, 2018

maybe touch on exit strategy/financing to boost returns. Can highlight refi scenario as well 10 yrs down the road

Feb 12, 2018

Is there anything an investor can do to boost his returns when selling? Assuming he owns 100% of the property (no loan). I'm not talking about upgrading units and such, but more from a capital perspective. Does something like a 'leveraged' sell exist?

Feb 12, 2018

delay capital gain tax by purchasing another property via 1031x, but I think we are getting carried away now.

Feb 12, 2018
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