Real Estate Portfolio Valuation Model (Updated Aug 2022)
Are you looking for a reliable and efficient way to assess the performance of your real estate portfolio? Look no further - I've got just the tool for you. The Real Estate Portfolio Valuation Model is the perfect solution to evaluate up to 30 properties in your portfolio. It's a "roll-up" model that allows you to examine how your properties perform when analyzed as a whole. In this article, I'll walk you through its features and offer valuable insights on how to use it effectively.
About the Real Estate Portfolio Valuation Model
The Real Estate Portfolio Valuation Model is a dynamic tool equipped with all the necessary calculations to determine portfolio and property-level return and risk metrics. It can handle various financing assumptions and offers the flexibility to explore multiple scenarios. Let's take a closer look at its main tabs:
Version
This tab provides a summary of changes made to the model and includes links to resources that can help you make the most of it.
Portfolio Summary
In this tab, you'll find seven portfolio-level assumptions, along with a comprehensive summary of portfolio metrics, financing assumptions, and investor-level returns.
Property Assumptions
This tab allows you to input physical, valuation, and financing assumptions for each property in your portfolio.
Cash Flow
Here, you can enter assumptions for Effective Gross Revenue (EGR), Net Operating Income (NOI), and Cash Flow from Operations (CFO) for each property on an annual basis.
Investor Level Returns
This tab provides assumptions for partnership structure and calculates waterfall distributions at the portfolio level.
Portfolio Level Returns
It offers a roll-up of property-level operating cash flows and calculates portfolio-level risk and return metrics.
Property Level Returns
This tab provides detailed cash flow, risk metrics, and return metrics for each property. You can easily toggle between properties using the drop-down menu.
Debt
Here, you can find a summary of debt service and loan balances per year for each property.
Insert Cash Flow drop -->
This tab acts as a divider, separating the main tabs from any additional property-level cash flow tabs you may add.
The Real Estate Portfolio Valuation Model is an invaluable asset for managing your real estate portfolio effectively. Whether you're a seasoned investor or just starting, this tool will help you make informed decisions.
How to Use the Real Estate Portfolio Valuation Model
To ensure you make the most of the model, I have recorded two tutorial videos for your convenience. The first video, recorded in 2015, provides a basic walk-through of the model's functionality. Although some changes have been made since then, the core features remain intact. The second video, recorded in 2018, demonstrates how to incorporate your property-level cash flows into the portfolio tool and offers a walk-through of the Investor Level Returns tab.
Real Estate Portfolio Valuation Model - Basic Walk-through
Please note that this video was recorded some time ago, but it still provides a good overview of the model's core functionality.
Real Estate Portfolio Valuation Model - How to Insert Property-Level Cash Flows
This video explains how to properly model your property-level cash flows to achieve accurate portfolio-level results. It covers important considerations such as the analysis start date, analysis length, and necessary cash flow components for each property.
Download the Real Estate Portfolio Valuation Model
To ensure accessibility for all, the Real Estate Portfolio Valuation Model is offered on a "Pay What You're Able" basis. There is no minimum amount required, so you can enter $0 if you wish. Conversely, your support is greatly appreciated as it helps fund the ongoing development of valuable resources like this model. Similar real estate acquisition Excel models typically sell for $100-$300 per license.
To download the model, simply enter your desired price and provide an email address to receive the download link. Click "Continue" to proceed. If you have any questions about the "Pay What You're Able" program or why we choose to offer our models in this manner, please feel free to reach out to either Mike or Spencer.
We regularly update the Real Estate Portfolio Valuation Model, and paid contributors receive a new download link via email for every update made.
Version Notes
v3.4
- Removed the requirement for the analysis start date to begin on the first day of the month.
- Added a new module that allows for using either square footage (SF) or square meters (M2):
- Introduces a dropdown menu on the Portfolio Summary tab to select SF or M2 input (cell J2).
- Replaced all SF labels with a dynamic formula to accommodate both SF and M2.
- Various updates to placeholder values.
v3.3
- Removed a leftover cell link that was causing an 'automatic link' error.
- Fixed an issue where lender fees were incorrectly included in the unlevered cash flow calculation.
- Added a breakdown of partnership cash flow, including preferred return to LP and GP, return of capital to LP and GP, promote to GP, and excess cash flow to LP and GP.
- Formatting updates.
v3.2
- Added a GP Catch-Up Module to the Investor-Level Returns tab.
- Updated instructions on the Investor-Level Returns tab.
- Added a 'Levered IRR by Property' graph to the Portfolio Summary tab.
- Created a new named range called 'Range_Property_LIRR' to find levered IRR by property.
- Miscellaneous formatting enhancements and fixes.
v3.1
- Improved clarity of the Promote Structure language on the Investor Level Returns tab.
- Renamed 'Unlevered Cash Flow' to 'Cash Flow Before Debt Service' for consistency.
- Renamed 'Levered Cash Flow' to 'Cash Flow After Financing' for consistency.
- Added Portfolio-Level IRR and Equity Multiple calculations to the Portfolio Summary tab, including calculations with and without Sponsor fees.
- Updated Sponsor Equity Multiple calculation to include Sponsor fees.
- Set Print Areas for Portfolio Summary and Portfolio Level Returns tabs.
- Updated Version tab.
- Misc. formatting changes.
v3.0
- Added Direct cap value to the Portfolio Summary page.
- Made the annual cap rate on the Portfolio Level Returns tab optional.
- Added the option to use Equity Multiple hurdles in partnership waterfall calculations.
- Introduced the option to include sponsor fees in investor-level returns (e.g., asset management fees, acquisition fees, disposition fees, etc.).
- Removed the '$USD' signs to accommodate investments in currencies other than USD.
- Changed the Exit Cap Rate Year to an output rather than an assumption.
- Set the Exit Cap Rate Year to one year following the analysis end year, with a maximum of year 15.
- Fixed an issue where the 'Price' assumption was incorrectly appearing on the Property Assumptions tab.
- Ensured lender fees were included in All-in-Basis calculation.
- Removed the 'Purchase Price Method' assumption from the Portfolio Summary tab to avoid confusion.
- Renamed ARGUS Cash Flow tab to Insert Cash Flow Drop, to accommodate alternative operating cash flow projection options.
- Made headings, formatting, background colors, and fonts more consistent throughout the model.
v2.3
- Added an "Investor Level Returns" tab, utilizing the Real Estate Equity Waterfall Model.
- Fixed errors in conditional formatting.
- Added an "Investor Returns" box to the Portfolio Summary tab, summarizing the results from the Investor Level Returns tab.
- Corrected an error on the Portfolio Summary tab where the wrong cell was referenced when outputting the Levered IRR.
- Fixed an error on the Debt tab where individual loan balances were not appearing.
- Implemented additional formatting improvements.
v1.0
- Initial release.
The Real Estate Portfolio Valuation Model is constantly evolving to meet your needs, and we strive to provide the best possible resources for your real estate investments.
