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Objective: To use comparables to start to develop a plan for a current project using data from previous projects. As we start to develop this
Objective: To use comparables to start to develop a plan for a current project using data from
previous projects. As we start to develop this proforma to evaluate alternative cost proposals, we
are looking at costs only in a later assignment, we will consider both costs and income.
Background
A local development firm has an option to purchase and wants to develop a new acre property in
Irish Hills area in San Luis Obispo. The area is zoned agriculture currently, but the local planning
commission is very receptive to developing more housing in this area. You have been asked to help
determine the current construction costs for two options from the perspective of this developer.
See pages and for information on the two projects that the company is evaluating as Alternative
Models for this new Irish Hills project. Each Alternative Models has three dierent options such as
home style or number of bedrooms.
Case Study Assignment No Post Original Excel spreadsheet to Canvas Assignment
Create an excel spreadsheet to project the current costs for each of the two Alternative Models
one built by Shea and one by Pulte Apply an average inflation rate of per year to adjust the
costs reported to current dollars and calculate the following:
a What is the equivalent cost in todays dollars of the Shea Homes project as of the end of
the current quarter Apr
b What is the equivalent cost in todays dollars of the Pulte Homes project as of the end of
the current quarter Apr
c What is the projected cost of the Shea Homes project if it was built in as of the
beginning of the year
d What is the projected cost of the Pulte Homes project if it was built in as of the
beginning of the year
Hint: Develop an Excel spreadsheet to calculate a lump sum equivalent cost a Net Present Value
of each project at the beginning of its development and then use a Future Value to determine an
equivalent cost today or at some point in the future. All formulas should reference other cells; do
not type values into the formulas. To help with this case study a cash flow diagram for each project
has been included, a sample view of excel and the excel formulas provided in the text book.
Shea Multifamily in Aliso Viejo, California
Project description
This project was developed on an acres site and has luxury apartments. This apartment
community is located in Aliso Viejo's mixeduse development known as Vantis. The apartments are
adjacent to a new Homewood Suites by Hilton hotel, retail, oice and forsale residential. The
community oers a resident clubhouse, business center, fitness center, resortstyle pool with
cabanas, rooftop deck, and open space. Individual units feature a contemporary floor plan, woodstyle plank flooring, quartz countertops, stainless appliances and highend finishes throughout.
Units floorplans range from square feet for a studio to square feet for a bedroom unit.
The development consists of four floors with gross square feet. Project is wrapped around
a tier, space mechanically ventilated concrete framed parking structure. Exterior is plaster,
metal panels, stone, and wood siding.
The cost for the purchase and development of the site was $ in October Q at the
beginning of the preconstruction period. The preconstruction work cost was $ credited
three months after the start of preconstruction in January Q The construction costs of
$ can be assumed to be credited in a uniform series of costs at the end of every quarter
from April Q through October Q quarters
The project schedule had first turnover of units months prior to completion. Preconstruction
started in October and final turnover and completion was September a total of
quarters or two years.
Hint: Complete a quarterly cashflow for analysis and then determine a PW as of October
Q before adjusting the costs for inflation to current dollars.
Pulte Homes in Victorville, California
Project Description
The acre development consists of singlefamily residents with three dierent models with
approximately of each model. Model one, Cordoba, has sq feet with three Bedroom and
two bathrooms with a car garage. Model Seville, has sq feet with three Bedroom and two
bathrooms with a car garage. Model Toledo, has sq feet with four bedroom and two and
baths. The development was within a few miles of schools, and is close to shopping, restaurants,
and hospitals. The target audience was entrylevel home purchase.
The land cost for the site was $ credited in July Q at the beginning of site
development. Site development cost was $ credited in three equal quarterly payments
over the next nine months. The total home construction costs were $Pulte Homes in Victorville, California
Frajact Dewcription a The construction
was completed i
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