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April 24, 2017

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Cases and Tutorials Overview

I have developed a number of cases and tutorials to help students and other interested parties master various skill sets for real estate. This page provides a listing of those materials. The copyright to these cases and tutorials is held by the author; they are provided here as a courtesy and may be withdrawn/modified at any time. Please see disclaimer/copyright below for more information.

I used these materials in several of

my courses and encourage students to use them as a base that can become part of their "toolbox." I am also working on several books that will combine them into an integrated whole and include a series of problems and answer sets. If you have any suggestions, please Contact Me.

I am in the process of upgrading my site including my glossary, market data and other items. Please check out the rest of my site and check back for improvements and updates.

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This is a sequence of cases and tutorials I use in my Real Estate Process course to help students learn how to systematically explore alternative uses for a specified site without getting caught up in "analysis paralysis." The cases are presented in sequential order and incorporate a common framework to help users walk through the exploration of optimal use.

Real Estate Process Cases

  • Case 1: Building Envelope Calculations. An introduction to alternative approaches to calculating the maximum intensity of use allowed on a site under a variety of zoning, building code, and market constraints. Includes a framework for assessing the impact of alternative zoning scenarios and application of incentive programs.
  • Case 2: Total Replacement Cost Analysis. Drawing on the buidling envelope calculations, this case study illustrates an approach to calculating the total cost of a proposed project including hard and soft costs.
  • Case 3: Frontdoor/Backdoor Analysis. This presents an interactive static cash solvency model which can be used to test various development scenarios against market demand. I initially developed these in 1974 while a graduate student at the University of Wisconsin.
  • Case 4: Alternative Use Analysis. This is a framework I developed to help identify optimal use from alternative scenarios. It is based on real estate fundamentals, capital market requirements, demand considerations and public policy/benefits.
  • Case 5: Most Fitting Use. This is a case study of how Most Fitting Use analysis can be used to identify optimal real estate solutions for specific sites give specific criteria
  • Case 6: Discounted Cash Flow Analysis. This introduces dynamic, longitudinal investment analysis. It is an extension of Frontdoor/Backdoor analysis adding the ability to change assumptions over time as well as adding tax benefits and other non-cash flow parameters including extensive ratio analysis.

Real Estate Process Tutorials

  • Tutorial 1: Time Value of Money. An introduction to the Six Functions of a $1 used in real estate development, finance and investment decision-making. Includes basic equations, calculator instruction and Excel applications.
  • Tutorial 2: Parcel Tutorial. Provides an introduction to accessing publicly available data drawing from property assessment and other data sources.
  • Tutorial 3: Reverse Directory. Presents an overview of how to use the SuperPages to identify and/or profile tenants in a certain neighborhood or trade area.
  • Tutorial 4(a): Easi-Demographics. An introduction to a free, on-line system for accessing site-specific demographic data.
  • Tutorial 4(b): STDBonline. An overview of the subscription-based STDBonline demographic/mapping system applied to individual sites.


Real Estate Finance Problem Sets and Tutorials

Problem Sets. These problem sets are designed to walk students through a series of financial calculations, with each set drawing on TVM fundamentals and building on each other to advance skills and understanding through incremental learning experiences. The files have been converted to Adobe PDFs and have hyperlinks so for each problem the student can: 1) read the problem, 2) try to solve the problem, 3) click to a solution to check ansers and/or correct responses, and 4) return to the questions. They build on the Tutorial 1: Time Value of Money.

Advanced Excel Primers and Argus Tutorials. The following set of primers and tutorials present a range of advanced real estate finance and investment analysis tools. They range from Excel-based alternative residential mortgages and advanced rent roll models to Argus-asssisted portfolio analysis.

  • Alternative Residential Mortgages. This is an advanced primer that walks through Excel models for various forms of residential mortgage instruments. It is free-standing, but users should refer back to the Tutorial 1 on Time Value of Money to make sure they understand the "Six Functions of $" many of which are used to set up the mortgage schedules. Note also that the tutorial is fairly advanced, using embedded IF, IF(AND) and other built-in Excel functions to develop robust models that handle different sets of inputs.
  • Rent Roll Modeling in Excel. The basic Discounted Cash Flow (DCF) model presented earlier provides a solid introduction to DCF. However, the model assumes that the underlying property has a single tenant or class of tenants which are subject to the same assumptions over time. In most cases, commercial properties consist of a "bundle of leases" in the sense that they have multiple tenants with leases with varying terms, probabilities of renewal, commission structure, etc. Since these "real world" enhancements can create signficantly different cash flows than a single-tenant model, more precise DCF modeling should incorporate such nuances. This tutorial is designed to help users understand how to developed an advanced DCF model in Excel that accomodates the analysis of multi-tenant buildings. As such the model incorporates the leases with different starting dates, terms, rental specifications and other variables. The models use advanced Excel statements to make them robust and capable of handling different sets of assumptions so that it can be applied to other projects and scenarios. It builds on basic Discounted Cash Flow Analysis and incorporates some of the features built into Argus. As such, students mastering this tutorial will develop an intuitive and conceptual understanding of Argus. This will help users can interpret Argus, other third-party packages, and proprietary Excel models that many firms rely on with the knowledge base necessary to avoid getting caught up in merely plugging in numbers in an amorphous black box.
  • Introduction to Argus Project Analysis. This tutorial begins with some administative items related to using Argus on a Citrix server as is done at the Unversity of Washington. To provide a bridge between Excel-based DCF and Argus, the tutorial uses that same basic project as a case study. While Argus-specific, the tutorial and various tools can be extended to other packages and proforma models.
  • Argus Portfolio Analysis. This is an advanced tutorial that builds on project level Argus modeling to create a "portfolio" of properties. This is somewhat analogous to the "bundle of leases" that Argus handles but transcends that level of detail to include a "bundle of properties." In essence, Argus portfolio modeling involves the aggregation of individual property-level proformas into a consolidated portfolio. This supports more sophsticated analysis regarding the impact of various portfolio scenarios with respect to portfolio construction, buy/sell analysis and scenario analysis.

Disclaimer and Copyright. The tutorials, cases, problem sets and primers I have posted are my personal work and may or may not accurately reflect best practices or current industry standards. Furthermore, they are intended for academic use and should not be relied on in making business decisions. I am offering them here for informational purposes only and hope to help advance the teaching and applicaiton of fundamental real estate principles. I am also seeking feedback on how I can better package and disseminate the materials to reach a broader audienceI reserve the right to edit materials, add or delete itmes, or restrict access. In developing these materials, I am drawing on my combined academic and professional career where I have observed a critical need for more integrated, disciplined decision support models such as represented in these materials. If you have questions or suggestions for enhancements or improvements to this feature, please Contact Me