Daniel Lebret is a senior lecturer in real estate finance at the Cornell Nolan School of Hotel Administration. He has been at Cornell University since he received his Ph.D. in 2008, and his teaching responsibilities have included undergraduate and graduate courses on real estate finance, real estate financial modeling, real estate statistical modeling, urban economics, securitization, and structured finance, along with coaching teams of students for real estate finance case competitions.
In the competitive world of commercial real estate and asset management, creating reliable tools like acquisition models will allow you to make confident predictions, even in the face of common risks such as building vacancy. In this hands-on course, you will analyze the procedure for building a structural model from the ground up.
This course will start with forecasting rental income and its main challenge, vacancy, for an office building. Forecasting future operating income requires looking lease by lease through each source of operational revenue and expense. Some items, such as expense recoveries, are recurring; others, like tenant improvements and leasing commissions, are exceptional. From here, an estimation of value and performance will require an assessment of the risks to which the investment will be exposed. Aggregating this forecast of unlevered income after making the proper adjustments for risk is the foundation for all future acquisition models. By the end of this course, you will be poised for success as you apply the concepts from this course in your role and beyond.
You are required to have completed the following course or have equivalent experience before taking this course:
- Discounted Cash Flows in Real Estate
- Familiarity with the Microsoft Excel environment and the structure of a basic discounted cash flow model
- The ability to apply conditional functions in Excel (IF statements and LOOKUP, TRUE/FALSE, INDEX/MATCH, OFFSET, and MIN/MAX functions) to produce the desired outcome
Key Course Takeaways
- Precisely model vacancy for different property types
- Model for certainty versus uncertainty
- Create a model for expense recovery by lease type taking vacancies into consideration
- Develop a model for operating expenses by property type
- Create a model that demonstrates variations in recurring capital expenses
How It Works
Who Should Enroll
- Acquisition and asset managers
- Financial analysts
- Real estate investors
- Real estate development professionals
- Individuals looking to invest in commercial real estate
- MBA students
- City and regional planning professionals