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 $25-$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 $3$ and $4$ 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 di$/$erent options such as

home style or number of bedrooms.

Case Study Assignment No$.1$ 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 $8\%$ per year to adjust the

costs reported to current dollars and calculate the following:

a$)$ What is the equivalent cost in today$$s dollars of the Shea Homes project $($as of the end of

the current quarter $$ Apr $1,2024)?$

b$)$ What is the equivalent cost in today$$s dollars of the Pulte Homes project $($as of the end of

the current quarter $$ Apr $1,2024)?$

c$)$ What is the projected cost of the Shea Homes project if it was built in $2026($as of the

beginning of the year$)?$

d$)$ What is the projected cost of the Pulte Homes project if it was built in $2028($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 $8$ acres site and has $435$ luxury apartments. This apartment

community is located in Aliso Viejo's mixed$-$use development known as Vantis. The apartments are

adjacent to a new Homewood Suites by Hilton hotel, retail, o$/$ice and for$-$sale residential. The

community o$/$ers a resident clubhouse, business center, fitness center, resort$-$style pool with

cabanas, rooftop deck, and open space. Individual units feature a contemporary floor plan, woodstyle plank flooring, quartz countertops, stainless appliances and high$-$end finishes throughout.

Unit$$s floorplans range from $567$ square feet for a studio to $1260$ square feet for a $3-$bedroom unit.

The development consists of four floors with $559,152$ gross square feet. Project is wrapped around

a $6-$tier,$756$ 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 $$5,500,000$ in October $2014($Q$4)$ at the

beginning of the preconstruction period. The preconstruction work cost was $$500,000$ credited

three months after the start of preconstruction in January $2015($Q$1).$ The construction costs of

$$75,000,000$ can be assumed to be credited in a uniform series of costs at the end of every quarter

from April $2015($Q$2)$ through October $2016($Q$4)(7$ quarters$).$

The project schedule had first turnover of units $3$ months prior to completion. Preconstruction

started in October $2014$ and final turnover and completion was September $2016($a total of $8$

quarters or two years.$)$

$($Hint: Complete a quarterly cashflow for analysis and then determine a PW as of October $1,$

$2014($Q$4)$ before adjusting the costs for inflation to current dollars.$)$

Pulte Homes in Victorville, California

Project Description

The $101-$acre development consists of $458$ single$-$family residents with three di$/$erent models with

approximately $1/3$ of each model. Model one, Cordoba, has $1550$ sq$.$ feet with three Bedroom and

two bathrooms with a $2-$car garage. Model $2,$ Seville, has $1850$ sq$.$ feet with three Bedroom and two

bathrooms with a $2-$car garage. Model $3,$ Toledo, has $2150$ 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 entry$-$level home purchase.

The land cost for the site was $$4,351,000$ credited in July $2003($Q$3)$ at the beginning of site

development. Site development cost was $$22,024,678$ credited in three equal quarterly payments

over the next nine months. The total home construction costs were $$78,918,480.$ The construction

was completed in