Let’s start as we mean to finish. This is a great addition to the limited stock of texts relating to real estate valuations by spreadsheet. The existing portfolio of titles is pretty much limited to:
Philip Bowcock and Natalie Bayfield (2001) Excel for Surveyors Estates Gazette Books
Philip Bowcock and Natalie Bayfield (2003) Advanced Excel for Surveyors Estates Gazette Books
Stephen Fawcett (2003) Designing Flexible Cash Flows Estates Gazette Books
These texts are all now very old and, in fairness, varied greatly in their usefulness. The first two texts, despite the second one having the word “advanced” in its title, were very basic. I have used them with my students as background readers before they joined the course, but the contents were pretty much exhausted by the fourth week of a 12-week course. The third text by Fawcett is a much better and much more detailed book and a useful reference point for students trying to build flexibility into their valuation models.
But this new text is better than all three. In fact, my only real criticisms of the book are the title, the layout and the structure. The content is good, topical and well explained. There were even a couple of “tricks” in it that I didn’t know and I started teaching spreadsheets (on Lotus 123!) back in 1984!!
The minor problem that I have with the book, which applies to the “Designing Flexible Cash Flows” text too, is that the title assumes that the only valuations undertaken in the world are for property. As we know, they are not. The valuation of businesses, assets, financial instruments and liabilities all use cash flow analysis so just adding the words “Real Estate” or even the solitary “Property” to the title would be helpful. Similarly, whilst I understand that mention needs to be made to the changing versions of Excel, the prominence of “2010” in the title almost makes the book, apparently, redundant before it is published, as we are already on the 2013 version of the program. It would be better to just refer to “Excel” and then footnote that it is using 2010 in the book’s commentary. The reality is that the 2010 and 2013 versions are 99 per cent similar so there isn’t an issue but many potential readers will not know that.
The more annoying problem with the text is that jumps between using a spreadsheet for property management, investment valuations and development valuations. It simply doesn’t flow in the way in which the subjects would be taught in class. That limits its usefulness, in my view, both as a standalone reader and as a core text. It would have been so much better to arrange the information by topic of valuation and not function of the spreadsheet. With just a little more thought about the end user, the book could have been so much better yet still stick to the 50 worked examples.
And lastly, the whole layout is difficult to follow. I know that the physical size of the book is restrictive, but maybe the publisher should have thought of using an A4 (or equivalent) format.
But there are the things that can be improved. The more important aspect is the contents and that is good. The author does illustrate certain ways of doing things which I do differently but that is to be expected and it isn’t to say that I am right and he is wrong; it is just different ways of doing the same thing.
The books deals with logic statements to build in flexibility, data manipulation to manage information, lookups to allow variation and, most importantly, cash flows that allow for expectations and forecasts of growth.
As I said, I can’t use the book as a linear teaching tool but I can reference certain sections and chapters as I go through the topics in class. It is a great addition to my pedagogical armoury.
