Value Investing & Mixed Use Redevelopment from the Front lines

RSS Babak Ziai

  • Our Value Investment Pro forma Approach January 20, 2021
    The Yield-on-Total Cost approach factors in all of the feasibility, cost and risk that need to be considered on a project where you’re looking to add value. This is based on a simple formula: Total Yield or Annual Net Operating Income (=Rent-Vacancy-Operating Expenses) Divided by Total Project Cost (=Purchase Price+ Carry Cost during vacancy + […]
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  • Pro forma Valuation Approaches January 11, 2021
    To go back to our first principles, we’ve got three components: time value money, opportunity cost and risk. Those are all in our desired discount rate of return which is then applied to the series of cash flows which reflects the design, permitting the cost: the debt and the equity. In order to evaluate what […]
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  • How Two People Can See a Property Differently January 4, 2021
    Would a hungry entrepreneurial real estate investor that really needs to gain traction with investors look at a 5% cap rate as attractively as a very wealthy established owner with a lot of real estate? The established owner is going to look at 5% from their vantage point of wanting to preserve risk. Is this […]
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  • Valuation Principles that Incorporate Financial Tools and Critical Thinking January 1, 2021
    When we go back to critical thinking, we have to consider what the property is. Is it a retail building, a motel, a hotel or a stadium? What is it and what does that mean? What is it worth? To who? What is their risk preference? What is their opportunity cost? By setting our discount […]
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  • Finance Principles and Tools for Building a Pro forma December 28, 2020
    Finance principles are a category of mental models used when assembling a pro forma. These include the time value of money, which is effectively how the value of a dollar today is worth more than the value of a dollar tomorrow. The difference in that value is what’s called the discount rate, which accounts for […]
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  • Pro forma Financial Valuation Analysis December 21, 2020
    The pro forma is a financial valuation analysis framework that basically tells you what the property is worth based on whatever you’re going to do to it, or in our case, the property business plan. The pro forma is the central decision-making machine for any real estate project, it is your playbook. With the pro […]
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  • Critical Thinking: The What, the Why and Implications on Property Investment Value December 14, 2020
    Investing, developing and managing commercial real estate is all about critical thinking by continually asking: “What is it? Why? And then what are these resulting implications its value? This mental model is indeed critical (pun intended) to evaluating property value. If you look at a building or a piece of land, well, what is it? […]
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  • New Investors Start Here December 7, 2020
    I have the honor and pleasure of teaching finance for real estate investment and development at the undergrad and graduate school real estate programs at the University of Southern California. I don’t use a textbook. Instead, I work to provide real-life tools, financial concepts and applications for “financial underwriting” to determine the value of an […]
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  • Structuring Mixed-Use Deals November 30, 2020
    I think what differentiates our platform is that I look to create investment structures with partners, investors, lenders and community members to create alignment. How do you actually get multiple parties to agree that they’re going to benefit from an investment, and that from this, the result will be a larger total pie for everyone […]
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  • Starting BrandView Capital November 13, 2020
    I founded BrandView Capital Partners as an off-shoot of my prior firm LOWE. At LOWE, I was developing projects that involved disjointed uses of space, such as apartment units above commercial retail and office space, where the latter was more of an afterthought. While the Cities required commercial space to approve the development, our equity […]
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