Flexibility and Real Estate Valuation under Uncertainty : A Practical Guide for Developers

Intro -- Title Page -- Copyright Page -- Contents -- Foreword -- Authorsâ Preface -- Acknowledgments -- About the Companion Website -- Chapter 1 Discounted Cash Flow Valuation: The Basic Procedures and Concepts Underlying Spreadsheet Valuation Constitute the Springboard to our Approach of Analyzing Flexibility Under Uncertainty -- 1.1 Why the Focus on the Discounted Cash Flow Model? -- 1.2 Structure of a Discounted Cash Flow Spreadsheet -- 1.3 The Cash Flow Projection -- 1.4 Discount Rate -- 1.5 Market Value and Forward-Looking (Ex-Ante) Analysis -- 1.6 Backward-Looking (Ex-Post) Analysis -- 1.7 Conclusion -- Chapter 2 Economics of the Discounted Cash Flow Valuation Model: Understanding the Discount Rate is Critical -- 2.1 Choice of Discount Rate -- 2.2 Differences between Discount Rate, Opportunity Cost of Capital, and Internal Rate of Return -- 2.3 Net Present Value -- 2.4 Relationship between Discount Rate, Growth Rate, and Income Yield -- 2.5 Relationship between Discount Rate and Risk -- 2.6 Conclusion -- Chapter 3 Future Scenarios Matter: We Need to Recognize that Future Projections are Uncertain -- 3.1 The Standard Discounted Cash Flow Model Appears to be Deterministic -- 3.2 We Live in a World of Uncertainty -- 3.3 Discounted Cash Flow Pro Forma Cash Flows Are Expectations -- 3.4 Flexibility and Options -- 3.5 Conclusion -- Chapter 4 Scenario Analysis: Future Scenarios can Significantly and Surprisingly Affect the Present Value -- 4.1 Discounted Cash Flow Scenario Analysis -- 4.2 Scenarios Affect Value -- 4.3 Flexibility Has Value -- 4.4 Conclusion -- Chapter 5 Future Outcomes Cover a Range of Possibilities: We Can Describe Uncertainties in Real Estate Using Probability Distributions of Possible Future Outcomes -- 5.1 Distribution of Future Outcomes -- 5.2 Quantifying Input Distributions