Apartment Developer University 2020

Transforming the Real Estate Developer

How to Participate in the Coming Boom in Apartment Development

12 Online Courses with Derek Lobo, Now Available for Sale!

12 Videos

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With Downloadable Resources

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New apartment construction is the best development opportunity for developers today.

SVN Rock Advisors has been an industry leader within North America’s rental apartment industry for 30 years. We’ve created this video program on new apartment construction that will give you the tools you need to be a successful merchant apartment builder immediately after the COVID-19 lockdown.

Who Should Enroll?

  1. Developers
  2. Developers’ Family (call for details)
  3. Financiers
  4. Commercial Real Estate Fraternity

In these times, we think you, the experienced developer and your team, should consider transitioning your business to include merchant apartment building.

You already know how to build and develop; you’ve got 90% of the skills you need.  This online course series is going to teach you the other 10% of what you don’t know.

What You’ll Learn:

We’re taking you through the step-by-step process to rental apartment development: During this 4-week online program, you will learn the skills you need at each step of the development process to make your rental apartment development a success.

Why Apartments?

Building apartments is about wealth creation. The apartment developers of the 1960s and 70s built successful portfolios that have been handed down to their children, and their children’s children. Building apartments is about wealth preservation, tax deferral and cash flow.

Home builders from the 1960s and 70s – many are gone and a lot of the profit they made was paid to taxes, and there were no generational assets to hand to their children. Building condominiums and single family homes is about making profit and paying tax.

Which developer would you have rather been? The home builder? Or the apartment builder? It can be said that “the past reveals the future”.

Apartment Development Fundamentals are extraordinarily strong and will remain so in a post-COVID environment:

  1. From a Renter standpoint, there is an acute shortage of high quality rental product across North America – that’s not going to change.
  2. From an Investor standpoint (pension funds have money to deploy), most institutions are under-weighted in apartments. And they only want Class A product – apartment buildings that look like they’re office buildings. If you build it, they (renters) will come, and they (investors) will buy it.
  3. From a Financing perspective: Construction and takeout financing is available right now at extraordinarily low interest rates for the foreseeable future.
  4. Land and Construction Costs: It’s also reasonable to assume that land costs and construction costs may come off in a post-COVID environment. More renters, strong investors, low interest rates, cheaper land, and lower construction costs.

It’s the perfect storm to build apartments.

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The Program:

We’re offering 12 stand-alone video courses covering everything from finding a piece of dirt, taking it through feasibility and financing, construction, through to lease-up, stabilization and the sale of the building.

1. Fundamentals of Apartment Development

What You’ll Learn
This fast-paced webinar will cover the entire course content and give you the opportunity to quickly establish if apartment development suits you, your company, and your financial partners.
We’ll walk through the 10 key concepts that anyone getting into rental apartment development needs to know, using real examples and methodologies that merchant apartment builders need to know.
After This Session, You’ll Understand:
– Should you build?: The multiple moving factors you need to consider to make any rental apartment development a success. A quick ‘go’ or ‘no-go’.

– What to build: Comparison of land costs, construction costs, development yield and profit, vary by built form and geography; and at a high level, the pros- and cons- of building large vs. small units; How to maximize your parking without going underground.

– What’s the depth of the market: How many apartments can you build in a specific market and what is the absorption of those units?

– How much can you charge in rent? The art and science of setting rents and managing a lease-up; The importance of approaching your lease up like filling up an aeroplane.

– How much will your building be worth? How to pencil out your initial proforma and give your project a green light; Which variables make the most difference to your profitability in a development proforma… Hint: It’s not like a condo.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

2. A Fieldguide to Rental Apartment Development By The Numbers: Building a Detailed Financial Feasibility Model & Stress Testing It

What You’ll Learn:
Financial feasibility analysis for land development is performed in two stages. The first stage is a “quick and dirty” pro forma that summarizes the project’s revenues, expenses, interest, and profit using 30,000 ft data. The second is a multiperiod discounted cash flow (DCF) analysis that provides a detailed projection of cash flows, equity and loan needs, profits, and basic return measures, including internal rates of return (IRRs). Developers should perform both stages of analysis before they commit earnest money to a project.
In this session, we’ll explore the best way to increase your development yield in your next rental project. We’ll walk you through several scenarios to stress test the impact of construction cost variances, changes to operating costs, municipal rebates, lease-up time, exit cap rates, financing charges, to show you how rent is the most significant moving part to any rental development project.
There are many more moving parts to a rental project than any other asset class. And you need a flexible development proforma to accurately evaluate it.

After This Session, You’ll Understand:
– How to put together a development proforma for a purpose-built rental project
– The importance of timing in a rental proforma – Unlike a condo, which has a terminal point, apartment analysis goes from development, to construction, to lease-up, to stabilization. Analysis should include a 10-year window.
– How to stress test your potential returns.
– Which variables make the most difference to your profitability as a merchant apartment developer.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Noor Khan | CFO, SVN Rock Advisors Inc., Brokerage

Tuesday, May 19, 2020 at 11am EST

3. The Feasibility Study: The 5 Questions Every Developer Must Answer Before Breaking Ground

What You’ll Learn:
Are you building to sell, or are you building to keep? The answer to that question impacts a lot of your strategy. Project feasibility encompasses the full range of analyses that a developer must perform before committing to a given project. As feasibility analysis progresses, the developer must acquire more information that will indicate whether it makes sense to proceed further. During the feasibility period, the project may be canceled at any time, usually limiting losses to the costs of the feasibility study plus the cost of tying up the land. Positive information, however, usually justifies making the next increment of expenditure to acquire additional information.

After This Session, You’ll Understand:
– How to determine initial rental rates and operating costs from 30,000 ft.
– Market Analysis before Site Selection: Overall neighbourhood Rental rates, unit mix, and amenities
– Site Selection and Acquisition
– Market Analysis after Site Selection: Site specific rental rates, unit mix, and amenities
– The Regulatory Process: Working with the city to get your rental apartment project approved

Sally Turner | Director of Research & Consultancy, SVN Rock Advisors Inc., Brokerage

Wednesday, May 20, 2020 at 11am EST

4. Financing New Apartment Construction: How to Make Your Development Attractive to Lenders; When to CMHC Financing

What You’ll Learn:
Where is the smart money going? If you’re a developer looking to get financing for your building, the lenders will tell you what they look for, how they structure their deals, what the investment cycle is, and what their expectations on returns are. This session will help you tailor your financing needs to the right capital source and capital stack structure. Learn about different programs through various lenders, and how you can set your development up for success to receive the largest loan at the best interest rate.

After This Session, You’ll Understand:
– What is the capital stack? And how far up should you go?
– When and when not to use mezzanine financing
– When and when not to use CMHC financing
– How to make your project attractive to lenders in the rental development space

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Mark Kay | President, CFO Capital

Friday, May 22, 2020 at 11am EST

5. A Fieldguide to Municipal Taxes and Operating Costs

What You’ll Learn:
Understanding your projected NOI and ultimate valuation, requires a deep drill into operating expenses: You can’t just use an estimated operating expense ratio. This session will give you a deep drill into operating expenses, specifically property taxes and utilities, which make up the bulk of your operating expenses.
Utilities can average $1,800 in suite – but comprehensive submetering can cover multiple utilities to minimize the downward pressure on NOI. Taxes can comprise almost 50% of your operating expenses per unit, but there are strategies to minimize your tax burden that we’ll discuss in this session to optimize your NOI.

After This Session, You’ll Understand:
– What are the biggest ticket items in your expected operating expenses, and effective strategies to minimize them?
– The benefits of submetering, and multiple ways to structure a submetering contract to best suit your building.
– Strategies to minimize your property tax burden on your newly constructed rental apartment building.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Peter Mills | Co-CEO, Wyse Meter Solutions

David Gibson | Director, Real Property Tax Analytics, Yeoman & Associates Inc.

Monday, May 25, 2020 at 11am EST

6. The 4 Factors that Drive Rent: And Why You Have to get All 4 Correct

What You’ll Learn:
Rent is driven by 4 factors:
– Location
– Unit mix and sizing
– Amenities, finishes and features; and
– Property management platform.
We’ll present several examples of apartment developments and talk about how you set the rents in primary, secondary and tertiary markets.

After This Session, You’ll Understand:
– Looking at your competitors, and what to do when there’s no direct competitors to benchmark against.
– Understanding condo rentals and why they don’t tell the full story.
– It’s not always about price/sf: Renters think in terms of chunk (monthly) rent.
– How to do a market survey and analyze the results.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Sally Turner | Director of Research & Consultancy, SVN Rock Advisors Inc., Brokerage

7. Why Rental Apartments are the Best Option for Site Intensification and Conversion

The #1 factor constraining developers from large-scale rental development is the availability of land. Because of this, much of the new residential development in major markets have been infill and intensification development. Even in secondary and tertiary markets, infill development can prove to be an attractive option when compared to competing for new residential development land.

Existing apartment owners, and developers in other asset classes (retail, hotels, and others), have the advantage of owning existing sites that are prime for intensification and/or conversion, with purpose built rental. And most already have 90% of the skills they need to pivot their business model to become merchant apartment builders.

If you already own a site of any asset class with excess land – we’re going to look at the advantages you already have. If you’re looking to buy an infill site – we’re going to look at how you assess what is a good opportunity. We’ll show you how to get started, and the key mistakes to avoid.

After This Session, You’ll Understand:
– The advantages that other asset class owners already when becoming a merchant apartment builder.
– How to pivot your business model to make rental development a key component in your portfolio.
– How rental apartments can help ‘weather-proof’ your portfolio.
– What makes a good intensification site?
– The ‘do’s’ and ‘don’ts’ of site intensification.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Natan Ary | President, Kary On Inc.

8. How to Structure a Joint Venture so the Developer (and the Lender) Wins

What You’ll Learn:
Who gets what? You put the deal together but you could not have done so without equity partners. How do you split the cash flows? What about the sale? Often an equity investor will be offered a preferred return in order to make the deal more appealing. The developer or promoter may also use different structures to achieve a greater share of profits if the deal is a “Home Run”.
In this class we will discuss and model various methods of structuring a joint venture so both the developer (and their lender) wins.
We will examine various structures including the Traditional Split, The Rake, The Pref, Carried Interest, and Waterfall.

After This Session, You’ll Understand:
– The 3 questions that a JV partner always asks and what order he ask them in.

– Your different options for structuring a joint-venture partnership, and the considerations each party needs to take to assess the suitability of each structure.

– Successful examples of various joint venture agreements, for buildings of different sizes, deal structures, markets, and end goals.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Darryl McCullough | Real Estate Broker, CCIM

9. Writing & Executing The Marketing and Operating Plan to Get Your Building Full at the Highest Rent

What You’ll Learn:
Marketing begins while a project is still on the drawing board and does not end until a project is sold. In the purpose-built apartment development business, developers cannot create a market where one does not already exist. A developer must understand their target renter and design and build the apartment building with that specific renter in mind. The apartment for a millennial is not the same as the apartment for an aging baby boomer, and the way you market those two buildings is also different. Marketing is not a one-size fits all solution.
In this session, we’ll show you how to write and execute, a comprehensive sales, marketing and operations plan that covers all aspects of the marketing, lease-up, and long-term operation of your building.

After This Session, You’ll Understand:
– Defining the Marketing Strategy
– The Marketing, Leasing, and Training Plan
– The Marketing Budget
– Public Relations
– Advertising Strategies

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Carolyn Ennest | Transactions & Leasing Manager, SVN Rock Advisors Inc., Brokerage

10. Writing and Executing the Sales Plan Hiring, Training, Managing and Compensating Leasing Staff for Maximum Results

What You’ll Learn:
How do you lease up apartments faster, at higher rental rates while driving your marketing cost down? It’s all about your front line staff (it’s always about the front line). We understand the financial drivers behind a successful apartment project. In this session, we will delve into apartment development and rehabs to uncover today’s leading edge practices. Each apartment building deals with a unique set of circumstances. We will share our comprehensive apartment knowledge and show you how to deliver higher financial returns on apartment projects of varying size and complexity. We will identify standard operating practices for developers, owners, and investors on Marketing and Management of newly constructed or rehabbed buildings.

After This Session, You’ll Understand:
– How to hire a rental agent
– How to compensate rental agents to maximize their performance
– The 5 most important things a rental agent needs to know

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

11. Designing an Apartment Building to Keep or Sell: What’s the Difference?

What You’ll Learn:
Successfully designing a building to obtain top rent, requires a firm understanding of the trends, preferences, and needs that dictate rental behaviour and demand. In this session, we will

To successfully design and rent apartments to obtain top rent, knowing the trends, the preferences and the needs that govern the renter behaviour is essential:

– What are the top 7 mistakes developers make in working with their architect on their first rental project?
– What’s the typical unit mix and sizing by building size and market? How do you functionally design smaller units?
– Amenities: are they a profit centre or cost centre? Which are essential, and which are nice to have?
– Current trends and understanding the preferences and needs of renters to design, market and lease-up new and transitioned buildings
– Where is the balance between having a competitive offering and spending too much on the wrong things?

After This Session, You’ll Understand:
– Best practices in rental unit design, amenity provision, and general building flow
– Mistakes to avoid when designing your building with your architect

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Linnea Chamberlain | President, The Chamberlain Companies – Managers, Architects, Constructors

Mansoor Kazerouni | Global Director, Buildings/IBI Living+

12. Developing Your Business Plan to Become a Merchant Apartment Builder and/or Building Intergenerational Wealth

What You’ll Learn:
Based on your geographic footprint, and current skill set, we’re going to help you design and customized strategy for your company. We’ll help you determine where in your area you should build, what you should build, and how much money you should make, benchmarked against already successful apartment developments.
After the 12 sessions, each developer will get a one-hour consultation with our team, to focus in on your specific situation and opportunities. This session will synthesize everything you’ve learned in the past 4 weeks, and create a plan for you to move forward.

After This Session, You’ll Understand:
Your plan forward if you want to become a merchant apartment builder.
Your plan forward if you want to build and keep the assets for the next generation (call for details on enrollment of family members)
How to buy land, and creating the opportunity filter to quickly assess a piece of land.
We’ll walk you through several successful apartment developments and what made them a success.

Derek Lobo | CEO, SVN Rock Advisors Inc., Brokerage

Harvey Russell | Senior VP/Principal, NAI Advent