Valuing Hotel Intellectual Property and Structuring the Capital Stack
To structure the most advantageous deal it is critical to assess the value of hotel intellectual property accurately. This course is designed to help you develop a high level of financial sophistication so you can properly assess hotel management agreements and franchise agreements, as well as assign value to the real assets.
Professor Jan deRoos will guide you through the valuation of management agreements as well as franchise agreements using Excel-based spreadsheet tools. You will examine how debt and equity capital markets are used to financially engineer enhancements in the value of the real estate. To make sound financing decisions, you will calculate the costs of many of the commonly used mortgage loan features. Finally, you will explore how private equity sponsors design cash flow distribution mechanisms to align incentives and to achieve high returns.
This course emphasizes the role of debt capital in creating value for equity and the role of public and private equity in modern real estate capital markets. Throughout the course, you will use sophisticated spreadsheet tools to support and quantify the analyses, all of which can be used to analyze real-life opportunities.
Who Should Take this Course?
This course is designed for managers and professionals with financial or operational responsibility of hotel real estate, investments, financing, or asset management including asset managers, and portfolio managers; professionals working for or aspiring to work for real estate funds, REITs, real estate developers, real estate advisory firms, and others affiliated with the creation and use of real estate as a financial asset, focused on hotel real estate investment projects.
Participants who complete this course will be able to...
Estimate the value of hotel management agreements and their impact on shareholder value
Estimate the value of franchise agreements and their impact on shareholder value
Calculate the true costs of loans, taking into account a wide range of possible fees and features
Calculate the cash flow "waterfall" that is part of the promote structure in a private equity fund
Model duration to clarify the timing of cash returns and determine the modified internal rates of return (IRR)
Module 1 - Modeling and Valuing Management Agreements
- What are the implications of a new property in the market?
- Projecting Year-by-Year Costs of Management Contracts
Module 2 - Modeling and Valuing Franchise Agreements
- Valuing the Management Contract
- Modeling and Valuing Franchise Agreements
Module 3 - Debt Financing
- Review of Contemporary Structures
- Mortgage Calculation Workshop
- Commercial Mortgage-Backed Securities
Module 4 - Equity Financing
- Public Real Estate Equity
- Private Real Estate Equity and Fund Structures
- Prof. Jan de Roos, Temp Serv Prof Exempt, Cornell SC Johnson College of Business