In the most recent episode of the RealNex Webinar Series, Dr. Jeffrey Fisher presented an Introduction to Investment Analysis.
Dr. Fisher literally wrote the book on property finance and investments.Head of Data and Research for RealNex, he is Professor Emeritus of Real Estate at the Indiana University Kelley School of Business and he is a coauthor of Real Estate Finance and Investmentsand Income Property Valuation.
In addition to his Text and teaching at IU, he has developed or taught courses on investment analysis for the:
- Appraisal Institute,
- CCIM Institute,
- National Council of Real Estate Investment Fiduciaries among others
For the webinar, Dr. Fisher leveraged the RealNex MarketEdge Solution which is used to model investments in his Text Books. MarketEdge is a complete solution for Investment and comparative lease analysis as well as all the requisite reports and marketing output to professional present commercial real estate.
Dr. Fisher focused on all the “ingredients” needed to go into an analysis and then how they all need to be put togetherto get the most accurate value. To get the best results, Commercial Real Estate professionals bring their expertise to the analysis by organizing, determining and estimating, among other key attributes:
- Expected Holding Period
- Current In-Place Rent and anticipated Renewals/Re-Leasing
- Fixed and estimated increases, including CPI or percentage rent
- Operating Expenses with Re-imbursements and Pass Throughs
- Other Income
- Capital Expenditures and Reserve Accounts
- Debt Structure
- Depreciation Schedules
- Re-Sale Value
Once assembled, the data can be plugged into an analysis tool like MarketEdge to create detailed Discounted Cash Flow projections and estimated IRR or NPV among myriad other reports and decision-making metrics.
With MarketEdge in particular, users not only get the all the numbers and analytics in comprehensive, detailed reports, they can also swiftly create professional packages and custom branded presentations to market property. From initial Proposals, Opinions of Value, Flyers and Brochures to Full-Blown Offering Memoranda all MarketEdge Data can be re-purposed to streamline the investment sale process. Users can even host all the due-diligence in private and secure Deal Rooms to run Accelerated Sales.
During the presentation, Dr. Fisher was able to demonstrate the ease of creating authoritative output to assist clients market their property for the best price and make appropriate bids to realize desired returns. The key to successful investment sales is understanding the numbers and accurately determining value. The analysis shouldn’t be done on the “back on envelop” or simply by applying a cap rate. There is much more nuance to a proper analysis. The best brokers and the savviest investors rely on detailed reports and professional presentations to make the best decisions.
To access the presentation deck or recording of the session please click the link below.