Introduction to Modeling Investment Waterfall Distributions: ULI Live Online Workshop (October 2012)

Held over two sessions, this live online workshop will introduce students to the theory and practical construction of “waterfalls” for existing and new Microsoft Excel spreadsheet models. The waterfall is the method of distributing profits among partners within a transaction. In more complex transactions, profits are not distributed pari passu. (Pari passu is the proportional distribution of profits according to the percentage of capital invested—that is, with an investor who provides 80 percent of the capital receiving 80 percent of the profit.)During the first session, students will gain a theoretical understanding of what a waterfall is, as well as be exposed to the Microsoft Excel functions required to construct a waterfall. In the second session, students will construct a waterfall from a blank spreadsheet that can be incorporated into all existing spreadsheet models.

Students enrolling should be familiar with basic Excel commands and spreadsheet construction.

Course outline

Session 1: October 30, 2012 1:30–3:30 p.m. ET

Session highlights
  • Theoretical understanding of structured products, i.e., bifurcating cash flows by IRR
  • Understanding of specific Microsoft Excel functions required to build a waterfall
  • Understanding of language and concepts of a waterfall in real estate, e.g., “pref rate”
  • Rate conversions, e.g., equivalent nominal annual rate

Session 2: November 1, 2012 1:30–3:30 p.m. ET

Session highlights
  • Complete waterfall model in Microsoft Excel that is compatible and scalable with existing spreadsheet models
  • Quantify equity contributions
  • Quantify project cash flows
  • Quantify project characteristics
  • Calculate the first waterfall (pref rate), i.e., Tier I
  • Separate cash flows by tier investor
  • Analyze investor cash flows
  • Wrap-up/conclusion


Roger Staiger is managing director for Stage Capital LLC, an international real estate advisory firm providing expertise to clients in areas of global portfolio management and asset repositioning. Staiger, through Stage Capital, has successfully repositioned over $500 million in distressed and inefficient real estate projects globally. 

During his 20-year career, Staiger has worked in a number of industries at senior levels. He was managing director for Constellation Energy’s retail commodity division, CFO for Caruso Homes, and a portfolio manager for a large commingled pension fund in New York. 

Staiger holds multiple degrees, including a BS in electrical engineering, an MBA in investments, an MA in international transactions, and an MS in finance. Currently, he holds faculty positions in the real estate departments at Georgetown University and Johns Hopkins University. 

Staiger makes numerous capital market and economic presentations to organizations internationally. He also appears regularly on television and is often quoted in national periodicals and local newspapers.

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