Wall Street Prep
REIT Modeling
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REIT Modeling

47 Lessons
8h 31m
31,041 Students

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.

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)

Wall Street Prep’s Real Estate (REIT) Modeling course is used at top financial institutions and business schools.

Course Samples

Modeling the Income Statement, Part 1
Modeling CIP and Accum. Depreciation
Excel Logo
REIT Operating Modeling Template

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. Students with no prior background in Accounting should enroll in the Accounting Crash Course. Students with limited experience using Excel should enroll in the Excel Crash Course.

Course Agenda

    • Industry profile
    • Industry drivers and terminology
    • Tax advantages of REIT’s
    • REIT basics
    • The structure of REIT’s (UPREIT’s and DOWNREIT’s)
    • 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
    • Step-by-step modeling: Net Asset Value (NAV)
    • Common adjustments to NAV
    • Arriving at implied cap rates
    • Common NAV pitfalls and implicit assumptions

Course Syllabus

Chapter 1: REIT Industry Overview
1 Welcome to REIT Modeling 0:27
2 REIT Industry Overview, Part 1 15:17
3 REIT Industry Overview, Part 2 18:19
Chapter 2: Modeling A REIT's Income Statement
4 Modeling the Income Statement, Part 1 9:15
5 Modeling the Income Statement, Part 2 16:38
6 Modeling the Income Statement, Part 3 6:03
Chapter 3: Understanding & Modeling REIT's Segments
7 REIT Segments: Same Store Sales, Part 1 10:42
8 REIT Segments: Same Store Sales, Part 2 11:12
9 REIT Segments: Same Store Expenses and NOI 6:51
10 REIT Segments: Lease Ups, Renovations & Acquisitions 13:58
11 REIT Segments: Dispositions & Discontinued Ops, Part 1 8:29
12 REIT Segments: Dispositions & Discontinued Ops, Part 2 4:12
13 Modeling Segments: Same Store Properties 21:32
14 Modeling Segments: Acquisitions 8:32
15 Modeling Segments: Dispositions 14:35
16 Modeling Segments: Discontinued Ops and Dispositions Cleanup 9:08
17 Modeling Segments: Development 1:54
Chapter 4: Ancillary Income & Non-Operating Items
18 Modeling Ancillary and Other Income 11:18
19 Modeling Non-Operating Income and Finishing the Income Statement 15:47
Chapter 5: Understanding the REIT Balance Sheet
20 Understanding the Balance Sheet: Assets and A/P 16:07
21 Understanding the Balance Sheet: Non-Debt Liabilities 19:55
22 Understanding the Balance Sheet: Debt 7:02
Chapter 6:Modeling the REIT Balance Sheet
23 Modeling Real Estate Assets 15:51
24 Modeling CIP and Accum. Depreciation 11:28
25 Modeling Other Assets 3:04
26 Modeling Non-Debt Liabilities and Equity 11:31
27 Modeling Non-Revolver Debt 4:51
28 Balance Sheet Cleanup 5:10
Chapter 7: Cash Flow Statement & Model Cleanup
29 Understanding the Cash Flow Statement 17:09
30 Modeling the Cash Flow Statement 18:43
31 Pre-Revolver Model Cleanup 2:37
Chapter 8: The Revolver, Interest Expense & Circularity
32 Understanding the Revolver 9:40
33 Modeling the Revolver 9:43
34 Understanding Interest Expense 8:43
35 Modeling Interest Expense 18:52
36 Understanding Circularity 5:10
37 Handling Circularity in a Model 5:16
Chapter 9: Modeling Future Developments
38 Understanding a REIT's Developments 12:37
39 Modeling Developments, Part 1 11:24
40 Modeling Developments, Part 2 11:43
41 Modeling Developments, Part 3 & Finishing the Model 9:09
Chapter 10: Funds from Operations (FFO) & CAD
42 Understanding EBITDA, FFO and CAD 9:18
43 Modeling EBITDA, FFO and CAD 18:15
Chapter 11: REIT Valuation & the NAV Model
44 Introduction to REIT Valuation & NAV 17:47
45 NAV Modeling, Part 1 4:00
46 NAV Modeling, Part 2 21:29
47 The End 0:22
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