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XYZ Company is contemplating the following land acquisition with a view to develop, lease - up , and operate the resulting building. You have been
XYZ Company is contemplating the following land acquisition with a view to develop, leaseup and operate the resulting building. You have been asked to underwrite the opportunity, as well as prepare a brief writeup for Management summarizing the opportunity and your recommendation. Management would like to see returns on a year. year, and year hold scenario following construction completion. Where appropriate, please make your own defensible assumptions. You may also wish to include other costs that are not listed below that you feel are appropriate. Build a detailed financial model with the information below.
Timeline:
Months to rezone
months to construct months preleasing prior to occupancy
Additional months to stabilization
Massing:
Land area: Acres
Maximum FSI: x
Commercial GCA:
Commercial Efficiency:
Typical residential efficiency:
Average Residential Unit Size: ft
Residential Parking Ratio: xunit
Commercial Parking Ratio: xft Commercial CGA
Residential Storage Lockers:
Revenue:
Residential Rental Revenue per SF: Value engineer to reach minimum IRR on year hold and Development yield upon stabilization
Parking Revenue: $stallmonth
Storage Locker: $lockermonth
Commercial Revenue: $ PSF NNN
Costs:
Land: $
Purchase Price
Land Transfer Tax
Acquisition Fee
Construction:
$ft Residential GCA
$ft Commercial GCA
$Parking Stall
Construction Manager:
City & Municipal Fees
Residential Development Charges: $Residential Unit
Commercial Development Charges: $ft Commercial GCA
Municipal Planning Application Fees: $
Municipal Building Permit Fee: $ft GCA
Cashinlieu of Parkland Dedication: land value
Miscellaneous Municipal Fees: $
Professional Fees
$ft GCA
Additional Costs:
OffsettingCarrying NOI: $year prior to construction
Development Management: of total budget
Marketing: $residential unit
Commercial Leaseup commissions: $ft Commercial GCA
Residential Leaseup Commissions: $residential unit
Financing Costs
VTB:
LTV
per annum Interest Only
Construction Loan: Size: Max LTC subject to Min x DSCR
Construction Interest: Prime
Placement Fee onetime
Note: the construction loan will flip into an amortizing loan at construction completion
Amortizing Loan:
Interest Rate: Amortization Period: Years
Operating Expenses:
$Residential Unit
Property Management: HST on total residential revenue
Disposition:
Cap Rate: and on Residential and Commercial forward month NOI, respectively Broker Fee: on gross sales proceeds
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