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Learning Objectives
HP
-10BII Financial
Calculator Guide
- Demonstrate
the basic operation and features of the HP-10BII calculator
- Perform
calculator functions involving various keys
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Module
1: Overview of Commercial Real Estate
- List
the characteristics of each commercial real estate type: office,
industrial, retail and multifamily
- Be
aware of data and resources that would enhance decision-making for
each property type
- Distinguish
between the concerns of user clients (tenant representation) and
investor clients
- List
the types of services that can be offered to the commercial real
estate client
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Module
2: Commercial Investment Real Estate Marketing
- Define
market area and its variables (primary, secondary, tertiary)
- Recognize
which demographic data is pertinent to commercial real estate
marketing
- Comprehend
the complexities of vacancy rates (including absorption and product on
line)
- Identify
paper
and on-line resources for locating marketing data
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Module
3: The Commercial Lease
- Understand
gross and net leases
- Quantify
the differences between gross and net leases
- Understand
percentage leases
- Quantify
percentage leases
- Quantify
the effect of lease clauses
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Module
4: Real Estate Investment Analysis Tools
- Identify
the components of the Cash Flow Model
- Calculate
net operating income (NOI) and understand its importance
- Understand
the concept of initial investment
- Examine
cash flow before taxes and cash flow after taxes from the investor’s
point of view
- Understand
the concept of reversion
- Assess
the organizing principles of the T-bar and the entries on the T-bar
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Module
5: Introduction to Investment Analysis
- Know
the factors in a real estate investment, such as risk and liquidity
- Understand
investor preferences: initial investment, periodic returns,
timing relative to the amount, and timing of cash flows
- Use
the T-bar and the HP-10BII to solve for solutions and compare them
- Thoroughly
understand and calculate compounding and discounting problems
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Module
6: Mortgage Loans
- Apply
and calculate compounding and discounting techniques to mortgages
- Comprehend
the differences between the borrower’s and lender’s points of view
- Understand
and calculate amortization values—mortgage payment, loan balance,
interest, principal, amortizing periods other than annual
- Calculator functions for amortization
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Module
7: Internal Rate of Return
- Define
IRR
- Calculate
IRR for different scenarios—IRR of single amount to be received in
the future; IRR of an annuity; IRR of an annuity plus a single amount
received; and IRR of variable cash flows received
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Module
8: Real Estate Taxation
- The
tax issues that are important to a real estate investment for the
entire holding period—from the day the investment is purchased until
the day it is sold
- Taxable
income from operations, including mortgage interest and cost-recovery
deductions using the midmonth convention
- The
midmonth convention
- Tax
on sale of real estate, including cost-recovery recapture and capital
gains tax
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Module
9: Office Building Case Study
- Identify
and evaluate necessary property and market data
- Calculate
the impact of expenses and expense stops on cash flows
- Interpret
general market data and demographic statistics for use in commercial
real estate
- Compute
vacancy and absorption rates
- Determine
the financial impact of concessions and allowances on cash flows and
effective rent
- Forecast
net operating income and before- and after-tax cash flows
- Use
the capitalization method to determine a property’s value
- Calculate
mortgage payments and amortize loans
- Calculate
before- and after-tax cash flows and IRRs
- Use
the CCIM business forms to evaluate commercial real estate
investments
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