Hotel Real Estate Investments and Asset Management

www.ecornell.com

Online Certificate Program

Hotel Real Estate Investments and Asset ManagementSix-course Certificate from Cornell University’s School of Hotel Administration

SHA561 Financial Analysis of Hotel InvestmentsSHA562 Control of Hotel Real Estate

SHA563 Valuing Hotel Investments Through Effective ForecastingSHA564 Valuing Hotel Intellectual Property and Structuring the Capital Stack

SHA565 Developing an Asset Management StrategySHA566 Achieving Hotel Asset Management Objectives

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Certificate in Hotel Real Estate Investments and Asset ManagementA six-course certificate series from Cornell University’s School of Hotel Administration

Certificate OverviewWell-structured hotel real estate investments create value and provide benefits to all partners in a deal: owners, management companies, and/or franchisees. Understanding the value of hotel real estate investments and the dynamics of the financial and operational aspects of real estate invest-ments, asset management, and management contracts is critical to the success of mid-level and senior management in the hospitality and real estate industries.

This certificate series focuses on developing a comprehensive knowledge base and tool set that enables you to fully understand the complex dynamics surrounding the hotel real estate and manage-ment contracts from the point of view of the property owner, operator, and lender. There are three central themes to this certificate series:

-The separation of real estate ownership and control as a way to increase value as vital to contemporary practice -The valuation and financing of hotel real estate investments as a key competency for today’s decision makers-Asset management - a legitimate and respected tool for value creation and value improvement Who Should Take This Certificate?This certificate series designed for:-Managers and professionals in the hospitality industry with financial or operational responsibility for real estate, investments, or management contracts-General managers, asset managers and others with asset management responsibilities-Business development professionals with branded operators who have professional interaction with owners-Lenders, investors, real estate professionals, and developers who seek entrance into the hospitality real estate market

Certificate InformationTo earn the Certificate in Hotel Real Estate Investments and Asset Management, students must complete the following six courses:

SHA561 Financial Analysis of Hotel Investments•

SHA562 Control of Hotel Real Estate•

SHA563 Valuing Hotel Investments Through Effective Forecasting •

SHA564 Valuing Hotel Intellectual Property and Structuring the Capital Stack •

SHA565 Developing an Asset Management Strategy•

AccreditationParticipants who successfully complete the five courses in the series receive a Certificate in Hotel Real Estate Investments and Asset Management from Cornell University’s School of Hotel Administration.


A hotel’s real estate is one if its most valuable assets and it is essential to be able to accurately value this critical investment. This course uses practical and theoretically grounded tools of investment analysis and valuation to introduce participants to contemporary practices in lodging investments. Participants will learn to evaluate hotel investments and hotel financing decisions and structure deals that meet the needs of the owner, the operator, and the lender.

This course explores the multiple elements and factors involved in the hotel investment decision including the hotel owner-operator-lender partnership and the different ways each party will evaluate a real estate investment deal. This multi-party view will enable you to negotiate the most favorable agreement based on your priorities and requirements and evaluate alternatives. This course provides thorough coverage of how a deal is structured using debt and equity financing, and the impact of debt financing on equity returns.

Who Should Take This Course?This course is designed for:

Managers and professionals in the hospitality industry with financial or •

operational responsibility for real estate, investments, or management contractsGeneral managers, asset manager and others with asset management •

responsibilitiesBusiness development professionals with branded operators who have •

professional interaction with ownersLenders, investors, real estate professionals, and developers who seek •

entrance into the hospitality real estate market

Course FormatThis course contains the following modules:

The Hotel Owner-Operator-Lender Partnership•

Evaluating the Deal: How Owners, Operators, and Lenders Evaluate •

Proposed ProjectsStructuring the Deal: Current Equity and Debt Financing Structures•

Benefits to LearnerParticipants who complete this course will be able to:

Explain the varied motivations of owners, operators, and lenders in pursuing •

real-estate investmentsAnalyze and evaluate investment projects from the perspective of owners, •

operators, and lendersStructure hotel investments that meet the needs of all parties•

Make informed decisions about the attractiveness of hotel investments, •

especially the decision to invest equity in a hotel

Certificate InformationThis course can be applied to the following certificate:

Hotel Real Estate Investments and Asset Management•

Sponsoring SchoolCornell University’s School of Hotel Administration

SHA561 Financial Analysis of Hotel Investments

In most hotels, the physical ownership of the property is sepa-rated from the control and management of the hotel. This course explores the ways in which hotel investors separate ownership from control of the hotel and examines the two major decisions faced by owners: first, what are the benefits and costs of franchise affiliation? Second, under what conditions should an owner hire a professional operator?

Participants will learn how management contracts are negotiated and about the motivations of each negotiating party. They will learn to prepare term sheets from the perspectives of both owners and operators to provide insight into how to structure the most advantageous deal. This course also examines contemporary hotel leases prevalent around the world.








Operating Agreement Choices and Trends•

Negotiating Contemporary Hotel Franchise Agreements•

Negotiating Contemporary Management Contracts•


Explain the factors contributing to deciding who controls the daily opera-•

tions of hotels and whyDescribe the key attributes of contemporary hotel leases and their applicabil-•

ity in different international settingsEvaluate a proposed franchise agreement•

Assemble term sheets for new management contracts•

Analyze management contracts from the perspective of owners and •

operatorsCertificate InformationThis course can be applied to the following certificate:



SHA562 Control of Hotel Real Estate


Hotel investment opportunities cannot be properly evaluated without accurate forecasts of the revenues and expenses the property is expected to produce. This course builds expertise in producing accurate forecasts of occupancy, average rates, cash flows and real estate value needed to support hotel investment and lending decisions.

Participants will learn to accurately forecast hotel occupancies both for new properties and for existing properties facing significant new competition. They will forecast daily occupancy rates using a variety of contemporary techniques and tools, forecast hotel cash flows respecting the fixed and variable revenue and cost structure of a hotel. Participants will estimate the value of individual hotels, taking into account the impact of new properties on existing properties. Given that forecasts are only as accurate as the starting assumptions, participants learn how to develop and gather data to support all of these forecasts.








Forecasting Hotel Occupancy•

Forecasting Revenues and Expenses•

Valuation•


Perform a market study for a particular property•

Forecast occupancy and average daily rates•

Produce accurate forecasts of income and expenses•

Use the income approach to produce an estimate of market value•

Produce defensible and supportable estimates using the tools developed in •

this course




SHA563 Valuing Hotel Investments Through Effective Forecasting

Accurately assessing the value of hotel intellectual property is a critical component of structuring the most advantageous deal. This course is designed to develop a high level of financial sophistication in valuing hotel management contracts and valuing franchise agreements in addition to valuing the real assets.

Participants will value the intellectual property rights created in management contracts and franchise agreements and learn how debt and equity capital markets are used to financially engineer enhancements in the value of the real estate. Participants will also learn how to determine the cost of mortgage loans, be introduced to the secondary mortgage market and lodging REIT structures, and learn how to calculate the returns to private real estate fund investors and sponsors.








Modeling and Valuing Management Contracts and Franchise Agreements•

Debt Financing•

Equity Financing•


Estimate the value of management contracts and their impact on shareholder •

valueEstimate the value of franchise agreements and their impact on shareholder •

valueExplain how capital markets can be used to create value in the real estate•

Use the tools of modern finance to create value for equity via the specific •

use of debt instrumentsExplain the role of public equity and private equity in capital markets•

Use the tools of investment analysis to understand a ‘promote structure’ in a •

private equity real estate fund




SHA564 Valuing Hotel Intellectual Property and Structuring the Capital Stack


The hotel asset manager is responsible for managing lodging in-vestments to meet the specific objectives of ownership. The asset manager’s role in building value is analyzed at both the portfolio and the property level. This course focuses on the importance of developing a strategic vision for asset management, and for using the latest asset management techniques in pursuit of that strategic vision.

Participants will examine the role of the asset manager in real estate portfolio management and learn how to develop a strategic vision for asset management. They will learn how to create an as-set management plan designed to accomplish long-term financial goals, create forecasts, and build models that analyze sell versus hold alternatives and make optimal recommendations consistent with the asset management strategy and plan.








Portfolio Management•

Why Real Estate in the Portfolio?•

Economics of Portfolio Management•

Asset Management•

The Asset Management Process•

Highest and Best Use Forecasting•

Creating the Asset Management Plan•

Sell Versus Hold Decisions•

Sell v. Hold Strategies•

Selling and Holding•

Making the Decision•


Analyze the asset manager’s role in building value at both the portfolio and •

the property levelDevelop a strategic vision for asset management•

Create an asset management plan for a property’s long-term needs•

Model the optimal holding period and make recommendations on selling •

versus holding the asset




SHA565 Developing an Asset Management Strategy

Hotel asset management is the responsibility of managing the lodging investment to meet the specific objectives of ownership. This course introduces the latest asset management techniques and provides a set of practical tools and tactics that owners and asset managers can use to achieve their strategic objectives.

Participants will learn how to administer and renegotiate manage-ment contracts, evaluate capital expenditures and manage their execution, and monitor expenses to reduce costs. They will learn how to benchmark a property’s revenue and expense performance against the market, perform asset risk analyses tailored to current market conditions, and evaluate various refinancing opportunities to reduce debt costs or free up capital for other investment opportunities.








Asset Managing Hotel Management Contracts•

Managing Capital Expenditures•

Benchmarking Hotel Performance•

Risk Analysis and Refinancing•


Manage contract administration and contract renegotiation•

Make capital expenditure decisions and manage their execution•

Use industry-standard benchmarking tools to enhance revenues and reduce •

costsPerform risk analysis designed to calibrate risk by magnifying revenue •

enhancement and minimizing costs according to market conditionsPerform a refinancing analysis in order to reduce debt cost and to liberate •

illiquid equity for more productive investments




SHA566 Achieving Hotel Asset Management Objectives

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Hotel Real Estate Investments and Asset Management

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