Use Excel to create all solutions and submit an excel document for final HW submission. Use the mathematical functions within excel to make all calculations. Partial credit is only possible if functions are used in all calculable cells.

You hired an investment firm and a developer to build an office building on a 4-acre plot of land. Construction will begin at the end of 2020 (December 31, 2020). Use the follow deal structure to set up a development pro forma:

• Land Size: 4 acres
• Land Price: $160 square foot
• Floor Area Ratio: 10
• Leasable to Gross Area Ratio: 90%
• Hard costs per square foot $175
• Soft costs per square for $90
• Completing time is 2 years
• LTC (loan-to-cost) is 70%
• Annual interest rate is 5% and interest is capitalized
• Debt Drawn: Only when equity is exhausted
• Assume that 50% of land cost is paid in the first month and 50% in the last month
• Hard and Soft Costs are distributed evenly (This is not the case in real life but its an assumption to make your model easier).
• Investor contribution is 80%, the rest comes from developer.

Instructions

Make a development pro forma (The construction phase of the deal). Show the 2 years construction period monthly. When you are done, show the amount of the construction loan that needs to be refinanced.