Real estate portfolio optimization :the case of Obegi’s real estate assets -

Abstract

The project aimed at building a systematic model where we can optimize the return of a collection of Real Estate lands. This model was built on the Real Estate of Obegi’s family, which is a set of 33 lands in different regions in Lebanon. We studied 2 regions (Zahle and Kferdebian) and proposed different investment options for each land. The 3 most interesting business options were retained, and we developed a different financial model for each, where we estimated the Profitability, Rate of Return, Net Present Value using the projected income approach with risk assessment using simulation and sensitivity analysis. The tools used were Excel and Excel add-ins Palisade suite. The Markowitz modern portfolio theory‘s efficient frontier was generated. A discrete capital allocation model was then created in order to solve for the best transactions and investment weights combinations among the lands, which guarantee the maximum return for a given risk.