Finance for Real Estate Development

Cover; Copyright; About the Author; Foreword; Acknowledgments; Contents; Chapter 1. The Development Process; Real Estate Overview; The Development Process and Risk; Stages of Development; Predevelopment; Development; Close-out and Operation; Four Dimensions of Successful Development; Values; Information; Financial Viability; Relationships; Skills of a Successful Developer; Development Sectors; Customer Issues; Return, Absorption, and Risk; Case Study; Chapter 2. The Basics of Real Estate Finance; Basic Debt and Equity Structure; Project Valuation; Capitalization Rates.;Explaining how finances drive each decision in the real estate development process, this helpful industry guide recognizes the complexities and significant risks of each project and illustrates how to reconcile conflicting elements to ultimately achieve success. A 36-year real estate development veteran, author Charles Long shares the practical information and personal insights that he has gained over the course of his career, and weaves relevant real world examples into the text, helping to clarify the principles necessary to effectively manage a project in today's financial landscape. Ideal both for those starting out in real estate development and experienced professionals who want to learn the theory behind the practice, this book offers a different perspective on making the monetary decisions that are involved in property development projects. Cover Copyright About the Author Foreword Acknowledgments Contents Chapter 1. The Development Process Real Estate Overview The Development Process and Risk Stages of Development Predevelopment Development Close-out and Operation Four Dimensions of Successful Development Values Information Financial Viability Relationships Skills of a Successful Developer Development Sectors Customer Issues Return, Absorption, and Risk Case Study Chapter 2. The Basics of Real Estate Finance Basic Debt and Equity Structure Project Valuation Capitalization Rates. Measuring Project ReturnInternal Rates of Return Leverage Funding a Project Funding Predevelopment Costs Debt Funding Equity Funding The Typical Deal Financial Structuring for a Hypothetical Project Estimating Costs Evaluating Return Chapter 3. Land Valuation for Acquisition Determining a Valid Hurdle Rate for Evaluating . Project Viability Calculating the Supported Investment and Residual . Land Value Costs Residual Land Value Disciplined Acquisition: Site Selection, Negotiation, and Due Diligence Information Inputs Negotiating with Site Owners Due Diligence. Example: Simple Pro Forma for a Mixed-Use ProjectChapter 4. Task Management and Budgeting Task Management to Achieve Financial Viability Site Market Community Product/Project Design Cost and Construction Management Finance Personnel Selection Other Services Task Funding Chapter 5. Capital Markets for Real Estate Capital Market Conditions Capital Sources Banks, Savings and Loans, and Mutual Savings Banks Commercial Mortgage-Backed Securities Private Equity Capital Fiduciary Principles Investment Strategies Property Characteristics Sector Risk Regional Strength. Tenant StrengthValue-Add Opportunities Capital Markets and the Risk-Reward Evaluation Chapter 6. Obtaining Financing for Development Market Conditions Connecting with Capital Sources Accessing Predevelopment and Development Equity Capital Accessing Construction and Permanent Financing Finding a Buyer for the Property Presenting to Financing Sources Experience, Credibility, and Financial Capacity of the Development Entity The Development Project and the Business Plan Entitlement Process and Role of Public/Private Partnerships Conclusion. Chapter 7. The Development Entity, Joint Ventures, and the Financing StructureReal Estate Entities Partnerships Limited Liability Companies (LLC) S Corporations Real Estate Investment Trusts Corporations Elements of a Joint Venture Business Plan Participants Governance Capitalization Revenue Distribution Among the Partners General Provisions Financing Structure Profit Distribution to the Development Entity Example: Profit Distribution within a Development Entity Chapter 8. Managing the Entitlement Process for Financial Viability Mapping the Process Before Making an Offer. Explaining how finances drive each decision in the real estate development process, this helpful industry guide recognises the complexities and significant risks of each project and illustrates how to reconcile conflicting elements to ultimately achieve success. This book offers a different perspective on making the monetary decisions that are involved in property development projects. The development process The basics of real estate finance Land valuation for acquisition Task management and budgeting Capital markets for real estate Obtaining financing for development The development entity, joint ventures, and the financing structure Managing the entitlement process for financial viability Public/private partnerships How developers get capital. This book explains how finances drive a project and how each decision at each juncture plays a role in ultimately achieving financial viability