Underwriting Commercial Real Estate in a Dynamic Market : Case Studies

A recurrent theme in __Underwriting Commercial Real Estate in a Dynamic Market__ is that good thinking and good underwriting go together. This stands in contrast with "getting an answer" or even worse "reverse engineering" - getting to a solution by assuming that current trends in market pricing is best. The cases in __Underwriting Commercial Real Estate in a Dynamic Market__ will force readers to recognize that there is no single answer, but rather a range of answers that will depend on numerous perspectives. And, in order to make valuation decisions, they will have to undertake a rich conversation about what constitutes a good trade-off and what does not. Cases can be structured for use with introductory material as well as advanced topics. Cover Underwriting Commercial Real Estate in a Dynamic Market: Case Studies Copyright Dedication Acknowledgments Introduction: The Returns to Effort and Expertise Part I: Developing a Framework Case 1. Vista View and a Second Shot at Ownership Voicemail Moorage Capital Partners and Its New SVP Vista View and Local Fundamentals Options Deliverables Questions/Issues to Explore Case 2. Altitude and Perspective: Let the Fund Guide Investment? Mapmaker and Finding New Territory An Evolving Investment Thesis for Fund IX The Debate Deliverables Gail’s Notes The Arlington The Wellington Wellington, VA Case 3. Apples and Oranges: The Strengths and Weaknesses of Being a Generalist Entrepreneur Helping Entrepreneur Optics and Optionality Apples and Oranges? Apples or Oranges? Deliverables Isaac’s Notes for Les Fontaines Les Fontaines—Gurnee, Illinois Isaac’s Abstracts/Notes/Exhibit for Block Seven Block Seven Apartments—Denver, Colorado Case 4. Motor City Madness? The Search for Yield Takes Isaac to Detroit Escape From Los Angeles Local Cycles and Discovering Detroit Rolling Up a Portfolio Raising Capital Operating the Portfolio What Next? Deliverables Case 5. Forensic Underwriting or: What’s the Opposite of Big Data? “Big Data” “Little Data” Rose and Her Partners Reverse Engineering Playing With Little Data Purchase Price Economics Exhibits Part II: Extending the Framework: Commercial Leases Case 6. Bayview Double Take Underwriting Under Duress Static Valuation Valuation by Looking Forward Iterating and Making Decisions Revisiting Bayview Today Exhibits Case 7. Excuse Me, Where’s the Exit From Marina Bay? Getting to Marina Bay Getting Marina Bay Leased Up Leasing and Exiting Marina Bay Giving Directions Case 8. Atwood Corporate Center Finalizing the Investment Memo Atwood—Property Description and History Sales Project History Since 1994 Proposed Acquisition Details Capital Requirements Timeline Property Property Condition/Capital Budget Tenancy/Occupancy The Open Questions The Basic Framework Market Overview Orange County Office Market North Orange County Market Overview Current Demand in the Marketplace Exit Strategy Key Decision Makers S&D and Transit Tech Transit Tech Deliverables Case 9. Lombard Street Running Lean Changing Hats Deliverables Case 10. An Uncommon Option for Cloverfield Commons What the Analyst Heard Working Harder to Get to Close The Last Month and the Potential Discussions and Deadlines The Revised Offer Part III: Framework, Deal Structure, and Risk and Return Case 11. Making Sense of Eastgate Background Traveler Group—The Investment Memo Alternative Scenarios Scenario 1—Foreclosure Scenario 2—Deed-in-Lieu The Mortgage Loan Amount Interest Rate Maturity Date Tests per Extension Cash Sweep Intercreditor Agreement Purchase Rights Foreclosure Mortgage Transfer Senior Mezzanine Loan Transfer Junior Mezzanine Loan Transfer Guarantees Foreclosure Process Hotel Operations Investment Returns Payoff Scenario Obtain Title via DIL Scenario Completing the Memo Case 12. Exiting Fund IV The Email From Your Boss MetroVantage Advisors Investment Philosophy Fund Timeline and Sale Terms Notes From MVA’s Director of Acquisitions 257 Main Street Property and Development Description Proposed Sale Terms for 257 Main Street Deliverables Case 13. A Changing Retail Landscape and a Lease to Match Muddled Metaphors Lease Agreements Deliverables Case 14. Finding a Safe Way to Park: Investing in NNN Lease Properties Blurring Asset Classes RSNet and Its Perspective on Risk NNN Investment Deliverables NNN Lease Property Comparables Noncore” Properties NNN Lease Property Comparables Core” Properties Case 15. Let’s Do This Again The Memo La Poudre Partners Core and Periphery Funding the Basics and Moving Beyond Them Capitalizing the First Multifamily Deal Now and Next Steps Questions to Explore Exhibits Sources and Uses, Property Description, Valuation Year Cash Flows Abstracted JV Agreement Terms From the LOI Summary of the Proposed Investment Part IV: Iteration and Integration: Development and Redevelopment Case 16. Huntington Flats Introduction The Property(ies) (Re)Development Options Plan A: Operate as a Rental Plan B: Subdivide Plan C: Acquire Two Parcels and Redevelop the Larger Lot Case 17. Leaning Into Headwinds: Grocery-Anchored Retail in the Era of Amazon Uncovering Value in the Age of Amazon Company Background Prescott and Prescott PTC Puzzle Pieces Pad 1—Undeveloped Land Pad 2—Vacant Auto Shop Pad 4—Nationwide Sandwiches Deliverables Case 18. Anyone for Extra Innings? Let’s Play Two? Late-Cycle Underwriting for Irwindale Reliance and the Olympic Plant Looking Under Rocks in “Late Cycle” 2016 Irwindale Reliance Business Park as of 2016 The Seller—Vulcan Materials Corporation The City/Entitlements Proposed Timeline Market Comps Development LA Times Olympic Plant as of 2016 The Site Tenant and Lease Overview Building Overview Arts District Market Overview Entitlement Issues Status of Offer Extra-Innings in 2018? Case 19. The Minnifield Parcel Prologue The Development The Joint Venture The Challenge Exhibits–Office/Residential Land Residuals Case 20. Do Cycles Die of Old Age? Or Is 10 the New 6? Introduction Allocator Funds Versus Operators/Developers Edgar’s Firm and Its First Fund Current Economic Overview Investment Options and Deliverables Southern California Multifamily Development San Diego Infill Industrial Development Las Vegas Office Investment Preferred Equity/Mezz Options Conclusion/Recommendation Index A B C D E F G H I J K L M N O P Q R S T U V W Z Back Cover A recurrent theme in Underwriting Commercial Real Estate in a Dynamic Market is that good thinking and good underwriting go together. This stands in contrast with'getting an answer'or even worse'reverse engineering'– getting to a solution by assuming that current trends in market pricing is best. The cases in Underwriting Commercial Real Estate in a Dynamic Market will force readers to recognize that there is no single answer, but rather a range of answers that will depend on numerous perspectives. And, in order to make valuation decisions, they will have to undertake a rich conversation about what constitutes a good trade-off and what does not. Cases can be structured for use with introductory material as well as advanced topics. Encourages readers to think about alternatives and their viability Addresses real world variations and concentrates on large urban economic forces and their implications for real estate valuation Presents case studies that vary significantly in length and specificity Includes pedagogical materials such as case introductions and exhibits A Recurrent Theme In Underwriting Commercial Real Estate In A Dynamic Market Is That Good Thinking And Good Underwriting Go Together. This Stands In Contrast With Getting An Answer Or Even Worse Reverse Engineering - Getting To A Solution By Assuming That The Market Outcome Is Best. While The Cases In Underwriting Commercial Real Estate In A Dynamic Market May Not Yield The Answer, They Force A Rich Conversation About What Constitutes A Good Trade-off And What Does Not. Cases Can Be Structured For Use With Introductory Material As Well As Advanced Topics. Encourages Readers To Think About Alternatives And Their Viability Addresses Real World Variations And Concentrates On Large Urban Economic Forces And Their Implications For Real Estate Valuation Presents Case Studies That Vary Significantly In Length And Specificity Includes Pedagogical Materials Such As Case Introductions And Exhibits