The Advanced Real Estate Pro Forma Modeling Master Class (updated 1/2023)

The Complete Guide To Creating An Institutional-Quality Commercial Real Estate Pro Forma Model From Scratch In Excel

What you'll learn

Learn how to build dynamic, institutional-grade commercial real estate pro forma investment models from scratch for office, industrial, and retail properties

Learn how to model commercial lease structures and reimbursements all in Excel (without expensive software)

Learn how to create institutional, professionally formatted commercial real estate pro forma models to present to investors and partners

Requirements

Access to Microsoft Excel for Mac or PC, Mac Numbers, or Google Sheets

A basic understanding of real estate finance and financial modeling is recommended

Description

Want to learn how to build professional, dynamic, institutional-quality commercial real estate pro forma models from scratch for office, retail, and industrial properties in Microsoft Excel? This course will take you by the hand and walk you step-by-step through the entire process of building a complete, dynamic, eight-tab commercial real estate pro forma model, starting with a blank Excel workbook ending with a complete commercial real estate pro forma acquisition model that YOU'VE created, from scratch. When I was first learning real estate financial modeling, I would download real estate investment models or real estate investment calculators on the internet, only to feel overwhelmed and frustrated by the complex functions and formulas everywhere in the Excel file. And once I felt like I was getting used to one of these things, I still was petrified to touch or change anything because I didn't want to "break" the model. And honestly, even if I understood it and I believed the model was working correctly, I still had no idea if I could even trust the calculations in the first place. If you've ever felt any of these things, this course will pull back the curtain and uncover the "Black Box" that most real estate financial models appear to be. By the end of this course, you'll be able to build a dynamic, professional-quality commercial real estate pro forma model from scratch, and by the time you finish the last lecture, you'll have an institutional-quality model that you've built from start to finish.This course will teach you how to build a commercial real estate pro forma investment model the way the largest and most sophisticated private equity real estate firms look at deals. At the end of this course, you will be able to:Build an institutional-quality, dynamic commercial real estate pro forma investment model for office, retail, and industrial properties from scratch (without expensive software)Model advanced real estate financing structures like mezzanine debt, future funding for renovation projects, prepayment penalties, dynamic loan sizing based on multiple constraints, and more.Create a dynamic sources and uses table that tracks equity investments throughout the project, so you'll know exactly how much you'll need to fund a deal up-frontBuild dynamic working capital accounts to automatically fund operating shortfalls to prevent unexpected equity "capital calls" to investorsModel complex commercial real estate lease structures in Excel including NNN, FSG, MG, and BYS reimbursement structures, custom rent escalation schedules, percentage rent, and moreCreate dynamic re-leasing scenarios based on renewal probability and re-leasing assumptions to create future lease cash flows on autopilotModel investor distributions on a monthly, quarterly, and annual basis and be able to switch between the three options quickly and easilyCreate custom charts and graphs that automatically populate in your model, that you can use to present more clearly and professionally to investors, lenders, and partnersBuild formula "checks" to error-proof your work and feel confident your calculations are accurate and can be trustedThis course is perfect for you if:You're a college student or graduate student looking to break into real estate investment after graduation, and you're looking to add the key technical skill sets to your arsenal that will put you head and shoulders above the competition and allow you to land a lucrative career opportunity in the fieldYou're an existing real estate professional looking to advance your career, increase your compensation, and break into the real estate investment industry.You've have a basic understanding of real estate finance and financial modeling, and you're looking to take your real estate financial modeling skill set to an expert level to land a better job, make more money, or do more profitable real estate deals.Here's what our students have had to say:★★★★★ "This course really has it all. I model deals for experienced private equity real estate investors, and the principals I work for had never used a proforma as dynamic, versatile, and visually appealing as this model. If you need to analyze a commercial deal you should absolutely take the time to work through this course. Thanks, Justin! Already looking forward to the next course."★★★★★ "Best class I've taken, truly builds a phenomenal model with institutional quality complexity. Take this class!"★★★★★ "Amazing, above expectations!"If you have a solid understanding of real estate finance, and you're looking to apply that knowledge to analyze commercial real estate investment opportunities, enroll now and let's get started building this model together today. Looking forward to having you in the course!

Overview

Section 1: Introduction

Lecture 1 Introduction

Lecture 2 A Sneak Peek Into What You'll Build

Lecture 3 Who This Course Is For

Lecture 4 About This Course & Student Success Stories

Lecture 5 Key Terms & Definitions Cheat Sheet

Lecture 6 Excel Shortcuts & Hotkeys Cheat Sheet

Lecture 7 Disclaimer

Section 2: The Advanced Real Estate Pro Forma Model

Lecture 8 The 8 CRE Pro Forma Model Tabs

Lecture 9 Building Out The Summary Dashboard

Lecture 10 Modeling Dynamic Commercial Real Estate Leases

Lecture 11 Modeling CRE Operating Expenses

Lecture 12 Building Out The Monthly Cash Flow Statement

Lecture 13 Modeling The Annual Cash Flow "Roll-Up"

Lecture 14 Building Out The Financing Tab

Lecture 15 Construction Budget Modeling & Automatic "Checks"

Section 3: Advanced Real Estate Pro Forma Modeling Fundamentals

Lecture 16 How To Get The Most Out Of This Course

Lecture 17 Excel Financial Modeling Best Practices & Color Coding

Lecture 18 Removing Gridlines

Lecture 19 The Entire Sheet Formatting Trick

Lecture 20 Workbook & Iterative Calculations

Lecture 21 Advanced Excel Settings

Lecture 22 Downloading Macros (Optional)

Section 4: Part 1 - Building Out The Summary Dashboard

Lecture 23 Building Out The Property Details

Lecture 24 Formatting The Property Details

Lecture 25 Building Out Parking Information

Lecture 26 Modeling Key Acquisition Inputs

Lecture 27 Modeling Sale Information

Lecture 28 Investor Distribution Frequency & Project-Level Fees

Lecture 29 Building Out The Summary Details

Lecture 30 The Capital Budget Breakdown

Lecture 31 Sources & Uses - Part 1

Lecture 32 Sources & Uses - Part 2

Lecture 33 Building Out Unlevered & Levered Return Metrics

Lecture 34 Modeling Sale Details & The Formula Build-Out

Lecture 35 IRR Partitioning

Lecture 36 Sensitivity Analysis Build-Out

Lecture 37 Combining Dynamic Text Values

Lecture 38 Creating Dynamic Hold Period Intervals

Lecture 39 Sensitivity Analysis Finalization

Lecture 40 The Consolidated Rent Roll

Lecture 41 Modeling The Weighted Average Lease Term (WALT)

Lecture 42 Model Download & Review

Section 5: Part 2 - Dynamic Commercial Real Estate Lease Modeling

Lecture 43 Building Out The CRE Leases Tab

Lecture 44 In-Place Tenant Details

Lecture 45 Formatting The In-Place Tenant Details

Lecture 46 Building Out The Expense Reimbursement Structure

Lecture 47 Modeling The Rent Escalation Schedule

Lecture 48 Re-Leasing Assumptions

Lecture 49 Re-Leasing Costs

Lecture 50 Modeling Percentage Rent

Lecture 51 Tenant Cash Flow Timeline Build-Out

Lecture 52 Timeline Formatting & Tenant Set-Up

Lecture 53 Modeling In-Place Base Rent

Lecture 54 The In-Place Operating Expense Build-Out

Lecture 55 Modeling In-Place Reimbursements

Lecture 56 Modeling Percentage Rent

Lecture 57 Percentage Rent Update

Lecture 58 Modeling Up-Front Free Rent

Lecture 59 Modeling Re-Leasing Base Rent

Lecture 60 Modeling Re-Leasing Free Rent

Lecture 61 Modeling Re-Leasing Reimbursements

Lecture 62 Modeling Up-Front Tenant Improvements

Lecture 63 Modeling Up-Front Leasing Commissions

Lecture 64 Modeling Re-Leasing Tenant Improvements

Lecture 65 Modeling Re-Leasing Leasing Commissions

Lecture 66 Total Suite Cash Flow Finalization

Lecture 67 Creating Additional Leases

Lecture 68 Creating Additional Lease Cash Flows

Lecture 69 Formatting & Pro Rata Share Calculations

Lecture 70 Grouping Tenants

Lecture 71 Model Download & Review

Section 6: Part 3 - CRE Expense Modeling

Lecture 72 Building Out The Expenses Tab

Lecture 73 T-12 & Hold Period Operating Expense Modeling

Lecture 74 Modeling Operating Expense Assumptions

Lecture 75 Property Tax Information Inputs

Lecture 76 Modeling Credit Loss & Property Tax Growth Rates

Lecture 77 Property Tax Modeling

Lecture 78 Monthly Expense Modeling & Formatting

Lecture 79 Modeling Monthly Property Tax Cash Flows

Lecture 80 Modeling Insurance

Lecture 81 Modeling CAM & Other Expenses

Lecture 82 Model Download & Review

Section 7: Part 4 - Building Out The Monthly Cash Flows

Lecture 83 Introduction To The Monthly Cash Flow Tab

Lecture 84 Building Out The Monthly Cash Flow Timeline

Lecture 85 Modeling Revenue & Free Rent

Lecture 86 Modeling Credit Loss & Net Rental Income

Lecture 87 Modeling CAM Reimbursements & Percentage Rent

Lecture 88 Modeling Operating Expenses

Lecture 89 Modeling TIs & LCs

Lecture 90 Modeling Capital Reserves

Lecture 91 Modeling Acquisition Information

Lecture 92 Modeling Sale Information

Lecture 93 Building Out The Loan Information Section

Lecture 94 Model Download & Review

Section 8: Part 5 - Modeling Advanced Financing Structures

Lecture 95 Introduction To The Financing Tab

Lecture 96 Creating The Loan Information Table

Lecture 97 Building Out The Loan Metrics

Lecture 98 Interest Rate Modeling

Lecture 99 Loan Periods & Prepayment

Lecture 100 Sizing The Acquisition Loan - LTV & LTC

Lecture 101 Sizing The Acquisition Loan - DSCR

Lecture 102 Sizing The Acquisition Loan - Debt Yield

Lecture 103 Sizing The Mezzanine Loan - LTV & LTC

Lecture 104 Sizing The Mezzanine Loan - DSCR & Debt Yield

Lecture 105 Sizing The Refinance - LTV & LTC

Lecture 106 Sizing The Refinance - DSCR & Debt Yield

Lecture 107 The Acquisition Financing Build-Out

Lecture 108 Dynamic Acquisition Loan Balance Modeling

Lecture 109 Modeling Additional Loan Proceeds

Lecture 110 Naming Cells For Faster Modeling

Lecture 111 Chatham Forward Curves (Link)

Lecture 112 Chatham Forward Curves

Lecture 113 Building In The Floating Interest Rate Index

Lecture 114 Creating Dynamic Fixed & Floating Interest Rates

Lecture 115 Building Out The Total Loan Payment

Lecture 116 Total Loan Payment Formula Update

Lecture 117 Modeling Principal & Interest Payments

Lecture 118 Modeling The Acquisition Loan Payoff & Prepayment Penalty

Lecture 119 Creating Acquisition Financing "Checks"

Lecture 120 Mezzanine Financing Build-Out

Lecture 121 Modeling Mezzanine Debt Payments

Lecture 122 Refinance Build-Out

Lecture 123 Modeling Additional Refinance Loan Proceeds

Lecture 124 Modeling Total Refinance Loan Payments

Lecture 125 Modeling Refinance Principal & Interest Payments

Lecture 126 Modeling The Refinance Loan Payoff & Prepayment Penalty

Lecture 127 Refinancing Prepayment Penalty Formula Update

Lecture 128 Total Payment Formula Update

Lecture 129 SUMIF Trigger Build-Out

Lecture 130 Model Download & Review

Section 9: Part 6 - Creating A Dynamic Construction Budget

Lecture 131 Introduction To The Construction Budget Tab

Lecture 132 Building Out The Construction Budget Line Items

Lecture 133 Construction Budget Costs & Timing

Lecture 134 Straight-Line Construction Cost Modeling

Lecture 135 Construction Budget Checks & Formatting

Lecture 136 Construction Subtotals & MAX and MIN IF

Lecture 137 Modeling Contingencies

Lecture 138 Model Download & Review

Section 10: Part 7 - Building Out The Monthly Cash Flow Tab Part 2

Lecture 139 Modeling Management Fees & Construction Expenses

Lecture 140 Partnership Expense Modeling & Acquisition/Refinance Loan Proceed Funding

Lecture 141 How To Use SUMIF To Model Additional Loan Proceeds

Lecture 142 Building In Debt Service & Modeling The Loan Payoff

Lecture 143 Modeling Loan Fees

Lecture 144 Creating Dynamic Working Capital Funding

Lecture 145 Investor Distribution Modeling - Part 1

Lecture 146 Investor Distribution Modeling - Part 2

Lecture 147 Investor Distribution Modeling - Part 3

Lecture 148 Cash Flow SUM & Formatting Finalization

Lecture 149 Model Download & Review

Section 11: Part 8 - Creating The Annual Cash Flow "Roll-Up"

Lecture 150 Introduction To The Annual CF Tab

Lecture 151 The Annual Cash Flow "All-In-One" Formula

Lecture 152 Modeling Unlevered Cash-on-Cash Returns

Lecture 153 Modeling Levered Cash-on-Cash Returns

Lecture 154 Model Download & Review

Section 12: Part 9 - Dynamic Chart Creation & Finalizing The Advanced Pro Forma Model

Lecture 155 Modeling Asset Management Fees

Lecture 156 Property Tax Finalization - Dynamic Assessed Value Modeling

Lecture 157 Modeling Tenant Health Ratio

Lecture 158 Modeling DSCR, Debt Yield, & Total Cost

Lecture 159 Capital Budget Modeling

Lecture 160 Sources & Uses Finalization

Lecture 161 Modeling Levered Return Metrics (IRR, Equity Multiple, & Cash-on-Cash Return)

Lecture 162 Modeling Unlevered Return Metrics (IRR, Equity Multiple, & Cash-on-Cash Return)

Lecture 163 Building Out The Property Sale Details

Lecture 164 Building Out The Consolidated Rent Roll

Lecture 165 Modeling In-Place Rent

Lecture 166 Reimbursements & Lease Expirations

Lecture 167 Partitioning The IRR - Part 1

Lecture 168 Partitioning The IRR - Part 2

Lecture 169 XNPV Formula Update

Lecture 170 Creating The "IRR Partitioning" Chart

Lecture 171 Creating The "Base Rent Makeup" Chart

Lecture 172 Creating The "Dynamic Operating Metrics Over Time" Chart

Lecture 173 Dynamic Operating Metric Cash Flow Build-Out - Part 1

Lecture 174 Dynamic Operating Metric Cash Flow Build-Out - Part 2

Lecture 175 The Dynamic Operating Metric Chart Build-Out

Lecture 176 Creating The "DSCR Over Time" Chart - Part 1

Lecture 177 Creating The "DSCR Over Time" Chart - Part 2

Lecture 178 Running The Sensitivity Analysis

Lecture 179 Creating The "Checks" Tab

Lecture 180 Building Out The Model Checks & Conditional Formatting

Lecture 181 How To Use What You've Built

Lecture 182 Operating Shortfalls & IRR Partitioning Finalization

Lecture 183 Final Model Updates

Lecture 184 Model Download & Review - We're Done!

Section 13: Wrapping Up

Lecture 185 Where To Go From Here

Lecture 186 A Final Word

Section 14: Bonus Lecture

Lecture 187 Bonus Lecture - The Next Step

Real estate investors and professionals who want to learn how to create dynamic, institutional-quality commercial real estate pro forma models from scratch for office, industrial, and retail properties,Current real estate professional who want to become an expert in real estate financial modeling to advance their career and make more money,Aspiring commercial real estate investment professionals who want to begin a lucrative career in commercial real estate investing