Saturday, December 10, 2011

Day one of "Corporate Real Estate"

Dr. Margaret Latshaw, Started the class with introductions to JE Dunn (multi-billion dollar construction company) who shared their process of deciding where they were to put their corporate headquarters. Terry Dunn was accompanied by Greg Nook. They told the candid challenging story of their four year process step by step. They made some valuable observations about the real estate process.
Dr. Latshaw's personal experience working with Sprint, H&R Block and Bank of America has proven valuable in her design of this course. After JE Dunn's presentation, Margaret shared a academic discussion of corporate real estate based on our assigned readings, followed by a visit by Wayne Mathison who ran a 300 person corporate real estate department and is now a private consultant. We continued with a working lunch with Justin Chamberlain head of real estate from H & R Block and their retail portfolio. The challenges of opening up over 100 retail locations per month can be quite daunting. They outsource a large portion of their portfolio to Cassidy Turley and following Justin, we heard from Rich Etzkorn from Cassidy Turley who not only works with H&R Block but also is very involved with Edward Jones 12,000 locations around the country.
We'll close today with a review by me (Walt Clements) on some financial spreadsheets used to measure cost of occupancy that was introduced in our "on-line" sessions and then some presentation tips as the students prepare to make some presentations next month.
Holiday wishes to all.

Friday, December 9, 2011

First day of 'Capital Markets and Real Estate"

The “Capital Markets and Real Estate” course started yesterday under the instruction of Dr. Randy Anderson, the Director of the real estate program at the University of Central Florida. He comes with personal experience as a real estate investor as an individual and as a general partner in a private equity fund. His research in investment properties international and practical experience was evident as he shared his process for evaluating the four basic property types. Which property type should you be invested in and more importantly why? We learned which exogenous shocks to look for and how they impact our real estate investment decisions. We identified the major indicators to track and the free data websites from which to extract meaningful data and what it means. We discussed the possibilities of inflation, when interest rates were going to increase and more importantly. Most importantly he provides the factual data that makes Kansas City a prime location for institutional investment capital right now. He is an advisor to an investment firm who recently bought two large apartment complexes in Olathe, KS. Knowledge truly is Power!
Re = Rd + LR(Rp-Rd)




Another formula to measure leverage and corresponding risk associated with taking on more leverage. Practical insights were discussed concering what to consider when making forecasts of income and future sale price. Practical insights from experience.




That formula coupled with the simple Gordon Growth Model can provide some practical "back of the napkin" assessments when you consider real estate investing.




Dr. Anderson and Dr. Clark offered detailed explanations of how secondary markets work as well as the CMBS markets. How they work, and how we can use them.




Another information packed day.