Property valuation


Launch the demo

Overview

Property valuation is an implementation of a DCF-based model for real estate appraisal. The system calculates net operating income for 10 years for each portfolio based on the input data (rent roll, market assumptions, cost categories, etc.) provided by the user. Some intermediate statistics like income by rent roll item type (Office, Parking, Retail, etc.) are computed on-line. Some charts are available to visualize the results.

Metadata objects / Dimensions

  • Property Information (prop) is a central dimension which contain three hierarchy levels: portfolios, properties (buildings) and (rent roll) items (or tenants).
  • Lease Category (cat) describes the type of the rent-roll item (Office, Parking, Retail, etc.).
  • Lease Subcategory (class) is a simple subdivision of lease categories into four possible types (A, B, C, D) which is used to allow for different market assumptions on the same lease category (f.e. market rent could be 40 Euro for Office/A and 50 Euro for Office/B).
  • Position (pos) is a technical dimension to distinguish different measures/values in the cube. It contains members like: market rent, net operating income, discount rate, and so on.
  • Position type (posType) is a helper type which is not used in the cube directly. It describes formatting options for each position. (Currency, Date, Percentage, etc.)
  • Region (reg) is a helper type which is not used in the cube directly. It describes the location of each property (from the Property Information dimension) and is intended to be used for analysis to compute information like average rent or vacancy rate in a region. Possible values are: Munich, Frankfurt, etc...
  • Year (year) is the report year. Possible values are: 1, 2, 3, ... ,10
  • Building age (age) is used for automatic building maintenance costs computation. It divides building into 4 categories according to their age. (up to 5 years old, 6 - 10 years old, and so on)
  • Maintenance level (mLevel) is used for automatic building maintenance costs computation. It describes how well the building is beeing serviced. Possible values are: high, average and low.

Cubes

  • Appraisal is the main cube with dimensions: Property Information, Lease Category, Lease Subcategory, Position, Year.
  • Maintenance costs cube is a simple lookup table which contains maintenance costs per size unit (square meter) for different rent-roll item types depending on the building age and maintenance level. Dimensions are: Lease Category, Building age, Maintenance level.

Worksheets

There are two views: Appraisal and Maintenance costs (one per cube). Maintenance costs view contains a single worksheet with maintenance costs. The Appraisal view contains most of the functionality. The view is organized by the Property Information dimension. Following are the most important worksheets:

  • Rent roll on the property level is the main input worksheet which contains the rent roll information (lettable area, expire date, contract rent, etc.) for each tenant in the building: Meta-data screen
  • Market Assumptions on the property level is used to enter merket rents and average turnover vacancy in months for each lease subcategory in the building: Meta-data screen
  • Tenant computations on the rent item level is the place where most of the computations are imlemented. First current contract period number and the percentage of year till the contract ends is calculated for each year using the YEARFRAC-function. Then contract income (based on contract data) and market income (based on market assumptions) amounts are determined for each year. Turnover vacancy costs are substracted from years containing the end of a contract period. Maintenance costs are substracted as the last step. Meta-data screen
  • Portfolio balance sheet on the portfolio level is the last step in processing chain. Aggregated cash flow values are used to compute a net present value for the portfolio according to a specified discount rate. Meta-data screen