1. “Drinking from the Fire Hose Investment Basics from A to Z”
Wifi password : spacematters

2. Why Todd?
Analyzed thousands of deals totaling over 11,000 units and $2.5B
Teach these concepts for CCIM institute
Over 4,000 students in a dozen countries
I use these techniques on my properties and for my clients

3. Do investors own commercial real estate?

4. 1. Your name 2. Specialty 3. Trade area 4. Hope to get from today
Are you here today?
1. Your name 2. Specialty 3. Trade area 4. Hope to get from today

5. Goals for today:
Discover major investment benchmarks
GRM (Gross Rent Multiplier)
CAP Rate (Capitalization rate)
Cash on Cash
IRR unleveraged
IRR with leverage
IRR after tax
Look at real estate the same way investors, wall street, lenders and capital markets
Understand relationship between risk and return
Match investor needs with deal parameters

6. Major benchmarks for measuring investment real estate
GRM (Price/Annual Rents)
CAP Rate (NOI / Price)
Cash on Cash (CBFT / Down payment)
IRR (NPV)
Effective Tax Rate
Better than stock market (cash on cash and leverage)
Cash flow (vs. other investments)
Depreciation / tax benefits
Principal reduction on loan
Appreciation

7. What do we tell out clients
As to why they should own investment real estate?
Cash flow
Potential for Appreciation
Tax benefit
Leveraged benefit
Leveraged tax benefit

8. Load the spreadsheet
iPad
Or laptop
Excel or Numbers

9. Start with the Blank version

10. Citadel Apartments

12. 5 years of operations

13. + Sale opportunity at EOY 5

14. Announcing…the results
Investors tax rate drops from 25% to 21%

15. Source for inputs: ULI NM – Annual CAP rate survey
Apartment Association of NM – rent survey
IREM National – Annual expense survey
Attend industry events (like AANM annual outlook)

17. Have you heard? Walking is in
Last season
Raised profile
Fictitious ?

18. The first Apartment Association nationally Rent Survey with walk score summary

19. Results by Walk Score – 24% premium for walkability

20. Results by Bike Score – 24% premium

21. Results by Transit Score – 26% premium in rents per sf

22. Rents by Submarket

23. Millennial Market Leaders
Brand new one bedroom units - $1,195 – highest one bedroom rents in ABQ
Tour – 9/4/2014

24. Millennial Market Leaders
Silvermoon Lodge – 1 parking space per 4 units – under construction, prelease ahead of schedule

25. Market Leaders - Downtown
$1.38-$1.83/sf Amenities: - Location - no parking - mixed use
NEC 6th/Silver - small community - recent renovations
700 2nd SW - $1.63-$1.93sf - New community - small units - lots of communal space
Friendly

26. Why is $1.35 to $1.85 sf good?
At $2.00/sf we can afford steel construction
Steel = high rise development (high for ABQ is mid in most cities)
We finally have the zoning (downtown, uptown) to support high rise (and new UDO)

27. Interested in more? Sign up for CCIM
Masters degree in commercial real estate
Online and in classroom courses
160 hours of training to designation