Wall Street Prep – Real Estate (REIT) Modeling

Ideal for investment banking, equity research, and real estate professionals with a focus on REITs. Trainees build financial and valuation models for a REIT the way it’s done on the job.

Real Estate (REIT) Modeling

This course is designed to teach REIT modeling to students and professionals pursuing a career in finance, with a specific focus on analyzing REITs. First, we will learn about the REIT industry’s unique drivers and challenges. We will then build REIT financial and valuation models from scratch, using a step-by-step approach for an actual company, BRE Properties. Along the way, we will cover modeling best practices for same store properties, acquisitions, developments, and dispositions. In addition, we will model and deconstruct critical REIT profit metrics like FFO, AFFO, and CAD. The second part of the course will involve valuation modeling, with a focus on the Net Asset Value (NAV) approach.

Course Objective

At completion, trainees will have developed a comprehensive REIT model from scratch.

First, we will learn about the REIT industry’s unique drivers and challenges. We will then build REIT financial and valuation models from scratch, using a step-by-step approach for an actual company, BRE Properties. Along the way, we will cover modeling best practices for same store properties, acquisitions, developments, and dispositions. In addition, we model and deconstruct critical REIT profit metrics like FFO, AFFO, and CAD. Part 2 dives into valuation modeling, with a focus on the Net Asset Value (NAV) approach.

What You Will Learn

• In-depth REIT industry profile, drivers, terminology, tax advantages and structure (UPREIT’s and DOWNREIT’s)
• Segment-level modeling (same store properties, acquisitions, developments, and dispositions)
• REIT sector-specific drivers and forecasting best practices
• Common REIT valuation approaches including Net Asset Value (NAV), comparable company and transaction analyses, and discounted cash flow (DCF) analysis
• Modeling REIT-specific metrics and ratios – funds from operations (FFO) and adjusted funds from operations (AFFO / CAD)

Course Highlights

Step-By-Step Modeling Instruction

Wall Street Prep’s Real Estate (REIT) Modeling Course delivers step-by-step lessons through videos, readings, ready-to-use restructuring financial and valuation models and exercises using a real case study.

Real World “On the Job” Investment Banking Training

The Real Estate (REIT) Modeling Self Study program bridges the gap between academics and the real world and equips trainees with the practical financial skill set needed to succeed on the job. The program utilizes a case study format, as students follow their tutorial guide alongside the Excel model templates, and are directed to the appropriate external documents (SEC filings, research reports, etc.) in order to build complex Real Estate (REIT) models the way they would on the job.

Support Center

Upon enrollment, students gain 24-month free access to Wall Street Prep’s Online Support Center, where they receive answers to questions, free downloads, and important updates.

Macabacus Excel Plugin

Free access to Macabacus, all-in-one suite of time-saving tools designed for people who build financial models in Excel. Use keyboard shortcuts for common number formats, to cycle rapidly through different font and color schemes and to navigate a formula’s inputs across worksheets and workbooks. Easily understand long formulas with the powerful ‘Precedents’ and ‘Dependents’ Tool, and much more. This 6-month free access is for the full version of Macabacus that also includes essential tools for Powerpoint and Word!

Prerequisites

This course does not assume a prior background in Real Estate (REIT) Modeling. However, those who enroll should have an introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement) and proficiency in Excel.

Course Agenda

REIT overview

• Industry profile
• Industry drivers and terminology
• Tax advantages of REIT’s
• REIT basics
• The structure of REIT’s (UPREIT’s and DOWNREIT’s)

Modeling REIT financial statements

• Step-by-step modeling: Net Asset Value (NAV)
• Common adjustments to NAV
• Arriving at implied cap rates
• Common NAV pitfalls and implicit assumptions
• The financials of REIT’s as compared to other companies
• Working with press releases, financial filings, and historical data
• GAAP vs. Non-GAAP presentation of REIT financial data
• Sector-specific  drivers and forecasting best practices
• Forecasting Funds from operations (FFO), adjusted funds from operations (AFFO / CAD)Modeling same store properties
• Impact of Modeling acquisitions, developments and dispositions on the three financial statements
• Discontinued operations
• REIT balance sheet forecasting Completed properties, CIP and land under development
• Building a REIT cash flow statement

NAV modeling

• Step-by-step modeling: Net Asset Value (NAV)
• Common adjustments to NAV
• Arriving at implied cap rates
• Common NAV pitfalls and implicit assumptions

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