Real Estate Forensic Economics


At  Forster Advisors we concentrate on real estate-related issues, an area which we've covered for the past 3 decades. In some of our assignments we have been asked to propose new interest rates for crammed-down loans, using either the Till or the Blended-rate methods;  for other assignments we've provided the necessary calculations for lender-elected Section 1111 (b) situations. In other cases we have calculated damages due to loss of rents and/or loss of property due to fire or involuntary condemnation.                                                   

Generally, forensic economists apply economics to issues that arise in litigation. Examples include calculating money damages in cases of personal injury, wrongful death, wrongful termination of employment, and loss of expected business profit. Economists are also called upon to calculate the equitable distribution of assets in cases of marital dissolution, determine the present cost of life care plans in cases of severe disability, and evaluate economic losses in cases of failure of fiduciary duty. When a case fails to settle, either because the economic experts disagree or because of disagreements on other issues (e.g., liability, medical opinion or vocational opinion), the practicing forensic economist has to be prepared to explain and defend his or her professional opinion in open court or at a mediation/arbitration hearing.

(Eric Forster is the Managing Principal of Forster Advisors. He brings with him vast experience which covers all facets of the real estate industry, as well as real estate finance. His practice is national in scope, and he has qualified as an expert witness in federal and state courts in more than a dozen states.)

Commercial Properties:

Our real estate investment analysis division will prepare income-property investment analysis for all who deal with commercial or residential income properties: individual and institutional investors, developers, brokers, appraisers, lenders, attorneys, accountants, portfolio managers, financial planners, builders and architects.

We will produce a comprehensive 20-year projection for any type of commercial or residential income property, and construct anything from a simple and straightforward analysis to a highly sophisticated investment and partnership scenario. 

A detailed and flexible Annual Property Operating Data (APOD) worksheet allows us to project up to 20 individual line-item expenses, pass these expenses through to tenants and report the results in total dollars, dollars per square foot and dollars per unit.

The Cash Flow and Resale Analysis module allows you, the investor, to enter assumptions about the purchase, financing, resale, taxes, and operation of the subject property and to use this information to project the before- and after-tax benefits of ownership and resale. You can then let the program carry the before-tax data through to help you model a comprehensive partnership analysis.

Our Commercial Income module handles more than 1,000 commercial units;  it is easy to add and edit units and to enter assumptions about lease rollovers. A separate Basic Income module lets you work with apartment, mixed-use properties and simpler commercial properties. Make projections about current and future rent income for individual units or groups of units.

Parameters included in the comprehensive analysis are detailed income and expense projections, before- and after- tax cash flow calculations, IRR, MIRR, PV, cap rate and other ROI measurements.

General Property Information

  • Quick Analysis
  • Basic Income Summary
  • Commercial Income Summary
  • Annual Property Operating Data (expenses)
  • Cash Flow and Resale Analysis
  • Partnership Analysis
  • Lease vs. Buy Analysis
  • Sensitivity Analysis
  • Loan Amortization
  • Graphs
  • Detailed Capital Improvements
  • Decision Maker
  • Advanced Features, including Historic Rehab Tax Credit
  • 20 presentation-quality reports, including our popular Real Estate Business Plan and Executive Summary