EVALUATING COMMERCIAL REAL ESTATE INVESTMENTS USING COSTAR

Abstract

This paper presents a three-stage property investment evaluation project that integrates the CoStar database into real estate courses. Focusing on market analysis, demand-supply dynamics, real estate pro-forma, IRR estimation, and DCF valuation, the project enhances student understanding of foundational real estate investment knowledge and prepares them for evaluation of real estate investments. Students conduct an in-depth market and submarket analysis, formulate assumptions for their financial model, estimate returns, value the property, conduct sensitivity analyses, and present their findings in a professional investment prospectus. The project’s scaffolding design ensures active student engagement with the instructor feedback. Integration of CoStar and a hands-on evaluation of actual property investments deepens understanding of commercial real estate dynamics and KPIs, fosters active learning, and provides students with essential job-ready skills.