Daniel Mandel, MBA

Valuation is an art, not a science. Uncertainty impacts property valuation in two ways as the cash flows from the property are uncertain and therefore the resultant valuation is uncertain. But if we can assign a probability to the inputs, then we can calculate a range of possible outcomes.

In corporate finance, the valuation approach was revolutionized with the introduction of Monte Carlo methods. Monte Carlo methods were applied to my proforma for a new real estate development to… Show more

Valuation is an art, not a science. Uncertainty impacts property valuation in two ways as the cash flows from the property are uncertain and therefore the resultant valuation is uncertain. But if we can assign a probability to the inputs, then we can calculate a range of possible outcomes.

In corporate finance, the valuation approach was revolutionized with the introduction of Monte Carlo methods. Monte Carlo methods were applied to my proforma for a new real estate development to explore the benefits in real estate underwriting.

Monte Carlo Simulation is a re-sampling iterative process. The results of the iterations are represented in a histogram allowing the users to know the range of the outcomes and the probability of the values. This simulation is useful when the outcome is the product of multiple random variables. The accuracy of the simulation depends on the quality and accuracy of the data used in the models. Otherwise, the model may simply be taking “Garbage In, Garbage Out.”

After running the analysis, I am not convinced that a Monte Carlo simulation is necessary given that a few key assumptions drive the valuations. Real estate investors have adopted a simplified probabilistically-based valuation method relying on sensitivity analysis of a few critical variables. Using the two variable Data Table function in Excel, it is easy to compute sensitivity tables changing two key variables at the same time. But on the other hand, one may be able to gain a competitive advantage attracting investors in my real estate firm by running Monte Carlo Simulations for DCFs by showing investors cumulative distributions for return metrics along with medians and standard deviations. Show less

We analyzed and underwrote three multi-family private equity investment opportunities (acquisition in Conroe, TX; value-add multi-family acquisition in the Arlington, TX; new construction multi-family in St. Paul, MN) creating and presenting our risk adjusted recommendation not to pursue the investments to the investment committee in a 15-minute PowerPoint presentation and an executive summary.

We created a marketing strategy for Exact Sciences to increase colorectal cancer screening rates by (1) targeting continuing medical education conferences for current OB/GYNs to educate them the benefits of the less-invasive Cologuard test and (2) target medical school students while in school to instill in them the benefits of the less-invasive Cologuard test so they are aware of the test when they start prescribing colorectal screenings options to their patients.

Given that retail landscape is changing with the proliferation of online shopping and fast, traditional retail leases may need to change to adapt. The Covid-19 pandemic has created the perfect opportunity for the presented lifestyle center in the case "A Changing Retail Landscape & A Lease to Match" to experiment with the creative lease.

As a result, brick and mortar retail locations should focus more on experiential activities that are repeatable shared services that cannot be provided… Show more

Given that retail landscape is changing with the proliferation of online shopping and fast, traditional retail leases may need to change to adapt. The Covid-19 pandemic has created the perfect opportunity for the presented lifestyle center in the case "A Changing Retail Landscape & A Lease to Match" to experiment with the creative lease.

As a result, brick and mortar retail locations should focus more on experiential activities that are repeatable shared services that cannot be provided by online retailers like restaurants and golf simulators. This may require gambles for new concepts.

For the presented lifestyle center, we analyzed rents, leasing commission considerations, lease durations, co-tenancy clauses. We presented a creative lease structure that would foster these gambles highlighting the importance of aligning owner and tenant incentives while mitigating risk considerations. Show less

We wrote a paper arguing that the Fed should keep the Federal Funds Rate (“FFR”) unchanged given that the U.S. economy is running below potential output given high unemployment and low inflation. The Fed should continue to focus on average inflation targeting given that inflation has fallen short of the Fed's target for many years. We are not concerned that the fiscal stimulus packages will push the economy above potential given a flat Phillips curve. We also argue that globalization and… Show more

We wrote a paper arguing that the Fed should keep the Federal Funds Rate (“FFR”) unchanged given that the U.S. economy is running below potential output given high unemployment and low inflation. The Fed should continue to focus on average inflation targeting given that inflation has fallen short of the Fed's target for many years. We are not concerned that the fiscal stimulus packages will push the economy above potential given a flat Phillips curve. We also argue that globalization and technological advancements have put downward pressure on inflation. Therefore, the Fed should let the economy run above potential to help the U.S. economy recover from the COVID-19 global recession. Ultimately, the Fed should wait for the economic data to confirm that it has reached its price stability and maximum employment mandates. At this point, the Fed should first signal a taper of its asset purchases, then begin a taper of its asset purchases, and finally raise the FFR. However, historically recessions have occurred after the Fed raised the FFR; therefore, the Fed should tread lightly. Show less

Analyzed a new multi-family development with first floor retail in downtown Minneapolis concluding that the developer should accept the TIFF payment but should sell the property at stabilization.

Created a yearly construction budget including calculating construction interest without using circular references, determining NPV of TIF loan at origination and recapitalization, modeled a recapitalization transaction with retail lease renewals (in Excel).

Using Microsoft Excel and the @Risk add-in, created a simulation analysis to help benchmark the potential for random variation for an insurance company that has underwriters who decide which commercial insurance customers to select based on a combination of set underwriting rules established by the company and their own judgment based on a range of factors about whether or not a particular customers would be a reasonable risk for the company to take on. The director of underwriting is… Show more

Using Microsoft Excel and the @Risk add-in, created a simulation analysis to help benchmark the potential for random variation for an insurance company that has underwriters who decide which commercial insurance customers to select based on a combination of set underwriting rules established by the company and their own judgment based on a range of factors about whether or not a particular customers would be a reasonable risk for the company to take on. The director of underwriting is responsible for doing performance evaluations based on the metrics that are calculated for each underwriter. The director realizes that there be some underlying randomness behind the performance metrics and wants to create a benchmark for what the random variation could look like so she has a better sense of what type of results would be "unusual" to see if underwriters were simply performing "at expectations".

The director asked me to take the actuarial benchmarks and simulate for her the range of performance metrics she might observe if her underwriters were really all just performing at the actuarial benchmarks and had no underlying differences in their ability to select clients. One complicating factor is that underwriters have different numbers of clients in their book of business. This variation is based largely on how long the underwriter has been with the company. The underwriters with the fewest clients have 40 clients and those with the most have as many as 250 clients.

I explained in words how the benchmark ranges differ (or don't differ) for underwriters with 40 clients vs. those with 250 clients. Finally based on my analysis, I proposed a new way to define the "performance problem flag". Show less

Used Microsoft Excel to create a plot illustrating the average realized share vs. average predicted probability in that decile from Nate Silver's website FiveThrityEight (https://fivethirtyeight.com/) for March NCAA Men's Basketball Tournament Predictions 2011-2019 (excluding 2015). Articulated the calibration, discrimination, and whether the plot shows signs of systematic over or under-confidence or over fitting.

Finally, created annual brier scores to determine if the FiveThrityEight… Show more

Used Microsoft Excel to create a plot illustrating the average realized share vs. average predicted probability in that decile from Nate Silver's website FiveThrityEight (https://fivethirtyeight.com/) for March NCAA Men's Basketball Tournament Predictions 2011-2019 (excluding 2015). Articulated the calibration, discrimination, and whether the plot shows signs of systematic over or under-confidence or over fitting.

Finally, created annual brier scores to determine if the FiveThrityEight model is improving over time, concluding that it appears to be getting (except for the 2018 tournament). Show less

Pitched a value-add multi-family limited partnership opportunity in Waukegan, IL to a Private Equity Investment Fund highlighting how the opportunity meets their Fund's investment criteria.

Created the financial model with the following seven items (1) unit mix; (2) uses of capital with an escrow for common areas and rehabbing units; (3) sources of capital; (4) a robust unit vacancy analysis accounting for estimated renovation timing and cost; (5) income statement with detailed breakdown… Show more

Pitched a value-add multi-family limited partnership opportunity in Waukegan, IL to a Private Equity Investment Fund highlighting how the opportunity meets their Fund's investment criteria.

Created the financial model with the following seven items (1) unit mix; (2) uses of capital with an escrow for common areas and rehabbing units; (3) sources of capital; (4) a robust unit vacancy analysis accounting for estimated renovation timing and cost; (5) income statement with detailed breakdown of revenues and vacancy during the rehab, a sales analysis arriving at net cash flow to equity with the rehab escrow account, calculating net cash flow after the waterfall, and calculating LP cash flows and the sponsor cash flows after debt; (6) a return on rehab summary; and (7) sensitivity analysis for the estimated LP return. Show less

Presented a land development proposal for a Phased Single Family Development of vacant land in Madison, WI.

Completed market research for single family land development by sourcing market data analyzing sale and permit data, and developing a sales plan.

Created financial analysis for the phased development under different financing and selling strategies. Development modeling included an escrow account and different phasing plans.

Analyzed the Harvard Business School Case "In a Bind: Peak Sealing Technologies’ Product Line Extension Dilemma” (Harvard Business School Case). After preparing a thorough analysis, I advised that Peak should (1) launch a new separate brand line to prevent PST brand dilution targeting price conscious consumers, (2) further research this customer segment to determine the ideal marketing promotion campaign and evaluate if other channels in addition to distributors need to be served, (3) build a… Show more

Analyzed the Harvard Business School Case "In a Bind: Peak Sealing Technologies’ Product Line Extension Dilemma” (Harvard Business School Case). After preparing a thorough analysis, I advised that Peak should (1) launch a new separate brand line to prevent PST brand dilution targeting price conscious consumers, (2) further research this customer segment to determine the ideal marketing promotion campaign and evaluate if other channels in addition to distributors need to be served, (3) build a new sales force for the new brand and utilize the successful elements of its current promotion strategy, (4) better incentivize the existing salesforce to push the new products to the distributors, (5) price new products competitive to its competitor. Show less

Pitched a new retail development in Madison, WI completing the market research and financial analysis giving risk adjusted recommendations to the LP investors. Created a program summary, sources and uses, income statement, and waterfall. Developed a capital structure and rules for equity waterfall to finance the project. Determined valuation using several methods. Created tables and graphs for investors and principals.

Used Monte Carlo simulations in Excel using the add-in @Risk in order to create decision tools that help people make better and more confident financial decisions regarding health insurance options.

First, I ran simulations to create: a) create a graphical illustration of total spending in two health insurance options for a client and b) illustrate the impact of a general "high deductible" vs. "low deductible" strategy across these options.

Finally, I prepared an introspection… Show more

Used Monte Carlo simulations in Excel using the add-in @Risk in order to create decision tools that help people make better and more confident financial decisions regarding health insurance options.

First, I ran simulations to create: a) create a graphical illustration of total spending in two health insurance options for a client and b) illustrate the impact of a general "high deductible" vs. "low deductible" strategy across these options.

Finally, I prepared an introspection based on my life experience what I think would be the most effective way to provide information to an employee like this one when they are selecting from health insurance options at their employer. Show less

Utilized Microsoft Excel and @Risk add-in to (1) fit 3 distributions of stock returns using this spreadsheet of historical data and (2) simulate the stock portfolio with the distributions from part 1.

Finally, I provided an analysis as to why when simulating portfolio returns over different horizons one might want to consider the sensitivity of the results to using these two different distributions instead of the Logistic distribution.

In February 2021, we completed an ex-post analysis of a value-add investment opportunity to buy in Spring 2019 in a residential community ~190 of the 360 (52.8%) units with the hopes of completing a condo De-Conversion. The property was converted to condominiums in 2008 but due to the economic downturn only ~150 units were sold to individual investors.

Given the strong location with proximity to employment centers and entertainment amenities and the improving neighborhood demographics… Show more

In February 2021, we completed an ex-post analysis of a value-add investment opportunity to buy in Spring 2019 in a residential community ~190 of the 360 (52.8%) units with the hopes of completing a condo De-Conversion. The property was converted to condominiums in 2008 but due to the economic downturn only ~150 units were sold to individual investors.

Given the strong location with proximity to employment centers and entertainment amenities and the improving neighborhood demographics, we believed that this was a wise investment decision. But we cautioned that the firm may have trouble achieving the path to retain full control of the building. But were optimistic because the state statute allows that if 80% or more of the owners support a sale, all remaining owners are required to sell. Therefore, we advised the buyer to be covert when buying the condos using different LLCs. But we concluded that even if the De-Conversion could not be fully executed, the investment is still promising for its investors. Show less

Using Microsoft Excel and PrecisionTree add-in software, I analyzed a risk management case by creating a decision tree and a thorough, definitive recommendation with sensitivity analysis on the level of risk retention versus insurance coverage the company should have for its physical property risks.

Our team analyzed the Harvard Business School Case "Aqualisa Quartz: Simply a Better Shower". First, we identified that the key value problem for Aqualisa is a lack of trust among consumers, especially plumbers, for their new Quartz technology. To address the problem, we first recommended that the Acqualisa start by targeting plumbers with a clear marketing campaign and creating an educational installation step-by-step installation guide video highlighting the product benefits. Second… Show more

Our team analyzed the Harvard Business School Case "Aqualisa Quartz: Simply a Better Shower". First, we identified that the key value problem for Aqualisa is a lack of trust among consumers, especially plumbers, for their new Quartz technology. To address the problem, we first recommended that the Acqualisa start by targeting plumbers with a clear marketing campaign and creating an educational installation step-by-step installation guide video highlighting the product benefits. Second, Acqualisa should send plumbers free samples with hopes that they experience the product benefits and recommend more Aqualisa Quartz showers to their customers. The hope is that this will create a large customer lifetime value for these plumbers for the Quartz technology. Third, Acqualisa should track the campaign by monitoring new sales at the channels where these plumbers purchase the product. Finally, as a long-term investment, Acqualisa should invest now in research and development of a lower end equivalent for the developer and do-it-yourself market to exploit first mover advantages while carefully crafting a marketing approach to not dilute the Quartz brand. Show less

We analyzed the Harvard Business School Case "Mountain Man Brewing Company" (“MMBC”) identifying the problem faced by the company. Given the expanding market, we proposed that MMBC should launch a new light beer product given our market analysis targeting the 21–27-year-old demographic with a new marketing campaign developed to highlight all of MMBC’s core values while aligning them with the new product segment.

Prepared a basic and supplementary analysis for Blue Ridge Mill’s ("BRM") investment for an on-site woodyard from the University of Virginia Darden Business Publishing case "Worldwide Paper Company".

After a thorough analysis with sensitvity, I recommended investing in the project as the project is expected to generate a positive Net Present Value (“NPV”) for Worldwide Paper Company (“WPC”) to meet the company's goals to (1) reduce the cost of purchasing shortwood and (2) create and… Show more

Prepared a basic and supplementary analysis for Blue Ridge Mill’s ("BRM") investment for an on-site woodyard from the University of Virginia Darden Business Publishing case "Worldwide Paper Company".

After a thorough analysis with sensitvity, I recommended investing in the project as the project is expected to generate a positive Net Present Value (“NPV”) for Worldwide Paper Company (“WPC”) to meet the company's goals to (1) reduce the cost of purchasing shortwood and (2) create and market excess shortwood. Show less

Provided a critical review of the loan underwriting analysis for a new 30-month $15,715,000 construction loan for a multi-family deal in Austin, TX set in the early 1990's highlighting a summary of my detailed analysis of what is stated in the case, a listing of remaining questions that need further analysis, why those questions are important, and my conclusions about the assignment subject’s impact to the underwriting. Provided both a quantitative analysis and a qualitative written… Show more

Provided a critical review of the loan underwriting analysis for a new 30-month $15,715,000 construction loan for a multi-family deal in Austin, TX set in the early 1990's highlighting a summary of my detailed analysis of what is stated in the case, a listing of remaining questions that need further analysis, why those questions are important, and my conclusions about the assignment subject’s impact to the underwriting. Provided both a quantitative analysis and a qualitative written articulation of what the numbers and other information mean. Show less

Our team completed an industry analysis to assess the attractiveness of the American car rental industry for incumbents, and identify valuable industry-level problems using Porter's Five Forces Framework. We then created a strategy recommendation for Enterprise Holdings Inc. to gain more market share.

The key value problem that we identified for the industry is that companies are losing customers and market share to rideshare services.

Our strategy proposal to the Enterprise… Show more

Our team completed an industry analysis to assess the attractiveness of the American car rental industry for incumbents, and identify valuable industry-level problems using Porter's Five Forces Framework. We then created a strategy recommendation for Enterprise Holdings Inc. to gain more market share.

The key value problem that we identified for the industry is that companies are losing customers and market share to rideshare services.

Our strategy proposal to the Enterprise board of directors is to employ a resource-based theory by making improvements to Enterprise’s app enabling a new activity system of interdependent, value-creating activities designed to achieve a competitive advantage by offering a rental experience that exceeds ridesharing in convenience resulting in value creation by charging a higher price for Enterprise rentals while drawing more renters. By utilizing a differentiation advantage, Enterprise can increase consumer’s willingness-to-pay (“WTP”) to rent cars. This system will entice new customers and bring back old ones by removing the stigmas of long queues and signing contracts often associated with rental companies. Show less

Our team recommended to buy Oracle's stock (NYSE: ORCL) after completing a thorough company analysis and financial statement competitive utilizing the DuPont Framework.

Our team proposed analyzing historical Major League Baseball batting statistics in order to evaluate offensive independent variables. Once the most influential independent batting variables that best predict wins are identified, general managers can better identify prospective batting talent in hopes of obtaining more wins. Coaches could alter batting practice before and throughout the season focusing on further improving identified areas of team batting in hopes to increase wins.

We crafted a new marketing strategy in order to increase sales for the small business American Provenance.

We proposed new channels, marketing campaigns, and initiatives to increase the average order value.

We analyzed three teams highlighting the strengths of the team, the opportunities for improvement ("OFI") for the team, and recommendations we would offer the team leader in the case for addressing the OFIs.

Team proposed a 2,950 unit multi-family development concept for the 10.5 acres known as the "Back Nine" in the master planned development of Bishops Bay in Middleton, WI.

With trails, recreation, parks, and open space in the master planned development complementing our apartment complex, we believe that our development will positively contribute to the surrounding neighborhood.

Used statistical analysis in Excel to analyze and plot average annual growth of GDP per capita for countries.

Team followed Equity Residential (NYSE: EQR) all semester and then created a buy side analysis by completing a SWOT Analysis, Comparable REIT Analysis, DCF Valuation, DCF Sensitivity, NOI Break Down, and NAV Valuation.

Analyzed 2 ARGUS real estate case studies by sourcing market data, drawing assumptions from
market data, inputting assumptions into an ARGUS model, and making decisions using ARGUS reports.

Learned about ideal site layout, building floor plate design, and tenant mix for commercial real estate properties. Applied knowledge to create two development proposals with SketchUp Make software that capitalized on locational synergies.

Group of three traveled all expenses paid to corporate headquarters in Cleveland, OH to present to C-Suite of publicly traded REIT DDR six sustainable real estate initiatives to generate greater shareholder returns.

Team estimated the market value of the leased fee interest of the property located at 2310 Parmenter Street, Middleton, Wisconsin 53562. The property consists of a 50 unit multifamily building that was built in 2007 (lot1) and adjacent vacant land that will be developed into 74 unit multifamily building (lot 2). Final report was 123 pages of analysis, pictures, figures, etc

Team was given a site analysis case for a new Culver's location. We had to learn how to work with missing data and come up with a regression model and financial recommendation for the optimal location. We had to write for an audience that is intelligent but not conversant with statistical analysis or interpretation.

In one week, team analyzed a real estate acquisition case and created a 15-minute investor presentation with a complicated Excel distribution waterfall. Presentation highlighted an analysis of linkages, market, sources and uses, financial returns, sensitivity analysis, and risk mitigation.

In one week, team analyzed a real estate development case with an existing office building and adjacent vacant land for development. Group created a 20-minute investor presentation analyzing the macro economy, purchase price of entire site and adjacent vacant land, and optimization of the capital structure to reduce the weighted average cost of capital for the project.

Our team took an existing product/brand of Pucker Vodka and critically evaluated the marketing strategy (including the current advertisement) for that product/brand using the tools and concepts learned in the course. We found that Pucker was being targeted to the female demographic. We developed a better marketing strategy and provide justifications for our new strategy that included targeting both males and females. We produced a video advertisement for the product/brand.

Wrote a research paper arguing that in order to prevent the US National Government from plunging over the fiscal cliff, the United States Treasury should sell bonds with longer maturities to lock in today’s historically low interest rates.

I wrote this article in December 2012 for a class assignment as an undergraduate student at the University of Wisconsin-Madison as I pondered the proliferation of unpaid internships. Though the argument for allowing unpaid interns is appealing, upon closer examination this practice should be severely limited because employers are unjustly coercing young people into an unfair bargaining agreement. United States President Franklin Delano Roosevelt eloquently summarizes my argument against unpaid… Show more

I wrote this article in December 2012 for a class assignment as an undergraduate student at the University of Wisconsin-Madison as I pondered the proliferation of unpaid internships. Though the argument for allowing unpaid interns is appealing, upon closer examination this practice should be severely limited because employers are unjustly coercing young people into an unfair bargaining agreement. United States President Franklin Delano Roosevelt eloquently summarizes my argument against unpaid internships, “Our Nation so richly endowed with natural resources and with a capable and industrious population should be able to devise ways and means of insuring to all our able-bodied working men and women a fair day’s pay for a fair day’s work." Show less