Probabilistic Valuation and Feasibility Analysis for Real Estate Assets and Projects using @RISK 

Wednesday, August 21st

11am EDT New York 

8am PDT San Francisco
 CDT Mexico City

12pm BRT Rio de Janeiro
4pm BST London
5pm CEST Paris
6pm MSK Moscow 

The valuation of real estate assets and the financial feasibility analysis of real estate development projects typically involve a lot of uncertainties such as the expected monthly rental income or the sales prices of the units, the vacancy rate, the construction or renovation costs, the maintenance costs, the exit yield, etc… Furthermore, real estate investment analysis is typically performed using discounted cash flow (DCF) models (NPV analysis) over long term periods, often anywhere between 10 to 30 years, thereby making the prediction of the value of the real estate asset or the profit margin of a real estate development a real challenge.

In this webinar we’ll demonstrate how @RISK can help to improve such real estate valuation or feasibility models by applying Monte Carlo simulation using appropriate probability distribution for representing the uncertainties related to the various inputs. On the basis of a probabilistic DCF model we’ll illustrate how the range of the predicted value of a multi-apartment building can be determined as well as how likely it is that one can achieve a targeted internal rate of return (IRR) for a residential real estate development project. During the webinar we’ll also briefly touch on some of the other powerful features of @RISK such as Tornado diagrams, goal seek and advanced sensitivity analysis.

Of course, the use of @RISK, the principles of the underlying probabilistic models, as well as the illustrated features can equally be applied to examples and cases outside of the real estate sector.

Presenter: Peter Vanneck

Peter Vanneck is a trainer and consultant for Palisade. Peter is an executive professor in the Master of Real Estate program at the Antwerp Management School (Business School of the University of Antwerp in Belgium), where he also teaches simulation with @RISK.

Peter graduated as an agricultural engineer at the Catholic University of Leuven in Belgium and later obtained a Ph.D. in environmental engineering at the University of Ghent, with 2 years of his Ph.D. research spent at the University of Texas at Austin in the U.S.A. He worked for almost 10 years in the environmental remediation arena, as well as consultant for a few international environmental consulting companies and as a project engineer and technical director for the environmental division of the DEME group (Dredging Environmental and Marine Engineering).

Since 2004, he has been active as a founding partner of an investment company specializing in brownfield redevelopment and complex real estate development. In 2006 he obtained a Masters in Real Estate, and consequently his MRICS certification by the Royal Institute of Chartered Surveyors (www.rics.org). Through his own consulting company he also provides independent advice on business decision making under uncertainty, primarily regarding environmental and real estate problems focusing on feasibility studies, investment analysis, cost calculations, risk analysis, (real option) valuation and business plan development using simulation and modeling techniques.

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