Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Development Financial Study

2,516 views

Published on

This document provides a detailed overview of the financial analysis and underwriting process for a typical real estate development project, and highlights important features such as Performance Metrics, Capitalization, Sources & Uses, Development Budget, Annual & Quarterly Cash Flows / Proforma, Monte Carlo Simulation, Waterfall Structure, and more.

Published in: Real Estate

Development Financial Study

  1. 1.                     Real Estate Financial Advisory FINANCIAL STUDY Prepared for Client Name Client Company Name Date Private & Confidential SAMPLE
  2. 2. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 1 of 11 Date Client Company Name (“Client”) Client Name (“Client Contact”) Address PURPOSE OF REPORT: Ploutus Advisors, LLC was commissioned by the Client, per engagement letter and agreement dated _____________, to conduct a financial analysis for a proposed _______ unit apartment (for-rent) residential development project to be located at __________________________. This report includes a detailed financial analysis of a potential development scenario as presented by the Client to Ploutus Advisors, LLC. The development scenario analyzed as part of this report is as follows: _____________ rentable square feet of total project area which includes _______ market-rate rental apartments and __________ rentable square feet of retail This report has been prepared for the Client as a development program financial assessment document to enable and/or lay a roadmap for further discussion, refinement, and/or modification of the proposed development program. OVERVIEW: The following table summarizes a few of the key asset or project level results for the proposed development scenario: KEY METRICS Total Project Cost $________MM Cost Per Unit $___________ Levered Project Level IRR (5-Year) _____% Unlevered Project Level IRR (5-Year) _____% Cash-on-Cash Yield at Stabilization _____% Profit (Levered) $________MM Multiple (Levered) ______x SAMPLE
  3. 3. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 2 of 11 The total required equity is $______MM. During the development phase, $______MM is sourced via construction loan draws, and $______MM is accrued in the form of construction interest. Post development, upon stabilization of the project, the construction loan balance is repaid through permanent loan financing of $_______MM plus cash from operations. The analysis assumes a five (5) year investment horizon from development to exit. Per the development budget, approved by the Client, the land and pre-development cost accounts for _____% of the total budget. Hard and soft cost account for ______% and ______% of the total budget, respectively. The asset or project level cash flows are further distributed based on a joint-venture waterfall / partnership structure (“JV”). The terms used for a potential JV with an equity partner are as follows: Equity Contribution: Developer (“Sponsor”) _____% and Investors (“LP” or Limited Partners”) _____% Distribution: First, all invested equity to earn an IRR of _____% distributed pro-rata (“Hurdle Rate”) Thereafter, all invested equity to earn ______% of the remaining cash flow distributed pro-rata, and Sponsor to earn ______% of the remaining cash flow (“Promote”) All distributions are made pari-passu Based on the above proposed waterfall structure, the Limited Partners are projected to receive a five (5) year levered IRR of ______% and multiple of ______x. Results are on the following page and for detailed financial analysis refer to Appendix. SAMPLE
  4. 4. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 3 of 11 CAPITALIZATION: KEY PERFORMANCE METRICS: SAMPLE
  5. 5. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 4 of 11 STATIC FINANCIALS: CASH FLOW: SAMPLE
  6. 6. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 5 of 11 BUILDING AREA AND BUDGET COST BREAKDOWN: MONTE CARLO SIMULATION (MCS) RESULT: ASSUMPTIONS: The analysis is based on the following general assumptions as outlined below: 1) Development Program The development program includes ______ apartment units with an average unit area of approximately ______ SF. The unit breakdown is as follows: ____% are studios, ____% are 1 bed / 1 bath, ____% are 2 bed / 2 bath and _____% are 3 bed / 3 bath. The project also includes ______ SF of retail at the podium level. Parking provides for ____ stalls on two levels; ____ spaces at-grade and ____ spaces below-grade. The total rentable area of the project is _______ SF, and estimated gross building area is ______ SF. 2) Project Timeline Land Acquisition and Development – First 2 Years (24 months) Lease-Up – Year 3 (12 months) First Fully Stabilized Period – Year 4 Reversion – Year 5 3) Development Budget The land acquisition cost is $______MM. The hard cost is estimated to be $_____/SF SAMPLE
  7. 7. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 6 of 11 based on estimated gross building area. The total development cost pre-financing is estimated to be $_____MM or $_____/SF based on estimated gross building area. 4) Rents Apartment – The weighted average monthly per square foot rent is projected to be $_____. Based on the comparables, for-rent properties in the subject area currently have an average monthly per square foot rent of $_____. For Q1 2015, the downtown _________ apartment market measured an average rent of $_____ and occupancy of _______%. Retail – For the retail component, the analysis assumes a NNN monthly per square foot rent of $______. Other Income – Parking revenue of $_____ per month per unit at a pay rate of _____%, plus a combined pet and/or cable fee of $_____ per month per unit at a pay rate of ______% are included in the analysis. Rents are projected to escalate at _____% per year. 5) Operating Expenses Operating expenses for the apartments stabilize at ______% of effective gross income (“EGI”), equating to $_____ per month per unit. Operating expenses include a combined annual property plus asset management fee _____% of EGI. Operating expenses are projected to escalate at _____% per year and real estate taxes escalate at _____% per year. 6) Absorption Pre-leasing is assumed to begin in Quarter 8. _____% of the units are projected to be pre-leased. Thereafter, absorption is assumed at the rate of ____ apartment units per quarter. Stabilized vacancy is assumed as ______%. 7) Capitalization (Cap) Rate Stabilized value for evaluation of permanent debt is determined using a cap rate of _____%. The exit cap at reversion is assumed to be _____%. 8) Leverage The construction loan is assumed for a period of _____ months at an annual interest rate of ____%. An operating reserve is assumed for shortfalls during the lease-up phase. Maximum permanent loan financing is determined as the lesser of loan amount based on (i) loan-to-value of ______%, and (ii) debt service coverage ratio of _____x with an annual interest rate of _____% based on a ____ year amortization period. SAMPLE
  8. 8. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 7 of 11 RECOMMENDATIONS: To further substantiate many of the key assumptions used herein, the Client is advised to explore the following steps: (i) Conduct an in-depth review, and further value engineering, to refine and validate the development budget based on drawings with input from the architect, project manager, and general contractor. (ii) Conduct an apartment absorption study to ascertain current inventory level, competitive supply, absorption trends, future demand projections, future rental and vacancy trends, and the ability of submarket to absorb the planned project. GENERAL METHODOLOGY: This report includes an income-based analysis. In order to estimate the potential total return that may be generated by the project, a reversion, or sale, of the project is assumed. The sale value is calculated by applying an exit cap rate to the total net operating income (NOI). Key development cost assumptions and market research information used to conduct the financial feasibility analysis are complied from sources deemed reliable and/or provided by the Client. REPORT CONTENT: The financial analysis as part of this report comprises of the following components: 1. Result: Project level details such as: a. Capitalization: Breakdown of sources and uses b. Key Performance Metrics: Unlevered (without debt) and levered (with debt) - profit, invested equity, multiple, and internal rate of return (IRR) c. Cash Flow: Annual cash flows, unlevered, levered and cumulative with payback d. Cost Breakdown: Distribution of land, hard, and soft costs e. Static Financials: Summary of total project cost, stabilized value, and cash-on-cash yield f. Monte Carlo Simulation (MCS)1: Estimate of probabilities for levered IRR based on a sample size of 1,000 IRR values either being less than, between, or greater than pre-defined IRR limits 2. Cash Flows: Annual and quarterly proforma cash flows, and monthly development cost distribution are included. The annual proforma also shows the cash flows on both an unlevered and a levered basis. 3. Development Budget: Detailed budget with breakdown for each major cost category; land, hard and soft. Further, the development budget also lists itemized costs for major cost categories. 1 Monte Carlo Simulation (MCS): The levered IRR output of the financial analysis is subjected to a simulation test. The model generates 1,000 random levered IRR values based on the assumption that the levered IRR has a standard deviation of 20.0%. The result of the MCS is displayed on the Result page. SAMPLE
  9. 9. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 8 of 11 4. Financial Highlights: Projected stabilized value, maximum permanent debt estimate, and sources and uses for the development period. 5. Rent Roll & Comparables: Rent roll, breakdown of units by type, list of comparable rental properties, and data on the downtown Los Angeles market-rate rental residential market. 6. Waterfall: Proposed partnership or JV structure showing equity contribution and distribution of cash flows between prospective LP investors and the developer. SAMPLE
  10. 10. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 9 of 11 BIO: Adnan Tapia Adnan began his real estate career in 1993 and has over a period of 18 years worked on 16+ million square feet or US$2.5 billion worth of US and India focused real estate transactions across several product types (office, industrial, retail, residential, hospitality, mixed-use, land) and life cycles in areas such as real estate private equity, financial consulting, acquisitions and development. Currently, Adnan is a Principal at Ploutus Advisors; a boutique real estate investment and advisory firm based in Los Angeles where he helps identify, underwrite and evaluate real estate investment and development opportunities for investor clients, facilitates and advises on cross-border US-India real estate investment opportunities, and provides unbiased conflict-free corporate real estate financial consulting to owners and users of real estate. At Ploutus Advisors, Adnan has helped advise clients on over $200 million in real estate projects. Prior to Ploutus Advisors, Adnan co- managed the western US operations for UrbanAmerica (UA); an institutional urban real estate private equity firm that originated over US$2.0 billion in commercial and residential transactions throughout the US. During his tenure at UA, Adnan helped source, underwrite, evaluate, structure and present to investment committee potential acquisition and development joint venture opportunities. He played a key role on several projects; one such being the US$485 million acquisition of a 3.1 million square foot office portfolio. Further, he also assisted senior management in the pursuit and development of strategic business relationships as well as with internal fund operations. Prior to UA, Adnan worked at global real estate services firm Cushman & Wakefield (C&W) where he evaluated and structured complex transactions, and consulted on acquisition, disposition, real estate development, corporate leasing and critical internal operation- related assignments. Adnan has advised clients such as O’Melveny Myers, Alaska Airlines, Sempra Energy, Warner Bros., Washington Mutual (now part of JP Morgan Chase) and City National Bank among several others. Adnan started his real estate career in India, where he has worked on over 550 acres of land transactions and 1.3 million square feet of real estate development projects. § MBA in Banking and Finance, Case Western Reserve University, Ohio (nominated to the Honor Society of Beta Gamma Sigma) § Master in Engineering, Cornell University, New York § Bachelor in Civil Engineering, University of Pune, India § California Real Estate Broker License § Lecturer, UCLA Extension: Course – Real Estate Development, Construction and Management § Member ULI, NAIOP, Cornell Real Estate Council (CREC) Specialties: Real Estate Investment, Acquisitions, Development, Due Diligence, Underwriting & Financial Modeling, Business Development & Transaction Origination, Structuring & Negotiation, Joint Ventures, Financing SAMPLE
  11. 11. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 10 of 11 CONTACT: Adnan Tapia Principal Ploutus Advisors, LLC 1875 Century Park East, Suite 700 Century City, CA 90067 Tel: +1.424.274.3561 Fax: +1.424.288.5624 Email: atapia@ploutusadvisors.com DISCLAIMER: This report is based on inputs from third parties and/or sources deemed reliable. This report and its contents are only for informational purposes, and for use only by the intended recipient (“Client”). The information contained herein may be subject to errors and/or omissions. The Client should not solely rely on information contained herein and is hereby advised to conduct its own due diligence and consult with other advisors prior to making any investment decision. This analysis does not purport to be all- inclusive, or to contain all of the information that prospective investors, lenders, and/or other stakeholders may desire. Further, the findings and recommendations of this report may be subject to changes due to supply, demand, cost, and/or other changes related to the real estate product type, general macro and/or micro economic environment, and/or other parameters that are beyond the scope of this assignment and/or control of Ploutus Advisors, LLC. It should be noted that all financial projections are provided for general reference and informational purposes only in that they are based on assumptions relating to the general economy, competition, and other factors beyond the control of Ploutus Advisors, LLC and, therefore, are subject to material variation. There may be other elements to the project not analyzed herein that have significant tax and accounting implications, in addition to other factors that may impact the results of this report. Ploutus Advisors, LLC urges the Client to consult with their auditors, legal and/or tax advisors in order to fully evaluate and validate any such impact. Ploutus Advisors, LLC, and its officers, principals, owners, representatives and/or employees (collectively, “Ploutus Advisors, LLC”) do not make any representations, and do not provide any guarantees and/or warranties, expressed or implied, as to the accuracy and/or completeness of the report, its financial analysis and/or any of its contents. No independent demographic, econometric, market research, or development cost study was conducted by Ploutus Advisors, LLC as part of this analysis. No legal commitments and/or obligations shall arise by reason of this report or any of its contents. This report should not be used as the sole investment decision-making tool, and is not meant to replace or substitute an offering memorandum or private placement memorandum. SAMPLE
  12. 12. Client Company Name Property Name / Address Financial Study EXECUTIVE SUMMARY Page 11 of 11 APPENDIX DETAILED FINANCIALS SAMPLE
  13. 13. CLIENT NAME Property Name / Address FINANCIAL HIGHLIGHTS ESTIMATE OF PROFORMA STABILIZED VALUE Year 4 MAXIMUM DEBT LIMIT Gross Potential Rent $12,384,720 Permanent Loan Terms Less: Vacancy, Loss-to-Lease, Concessions $681,160 Interest Rate 5.000% Plus: Other Income $133,488 Amortization Period 30 Years Effective Gross Income (EGI) $11,837,048 Operating Expenses 33.8% $3,997,897 (i) Debt Based on Loan to Value (LTV) Net Operating Income (NOI) - Apartments $7,839,152 Maximum LTV Percentage 70.00% Net Operating Income (NOI) - Retail $698,649 Maximum Loan Based on LTV for Income Property $113,837,342 Net Operating Income (NOI) - Total $8,537,801 Capitalization Rate 5.25% (ii) Debt Based on Debt Coverage Ratio (DCR) Stabilized Value of Income Property $162,624,774 Monthly NOI $711,483 Maximum DSCR 1.25 Maximum Monthly Payment (Annual NOI/DSCR/12) $569,187 Maximum Loan Based on DCR for Income Property $106,029,020 Maximum Loan = Lesser of (i) LTV Result or (ii) DCR Result Maximum Loan for Income Property $106,029,020 SOURCES & USES - DEVELOPMENT PERIOD TOTAL Year 0 Year 1 Year 2 USES Total Development Costs, Excluding Interest $126,359,752 $14,767,068 $40,635,153 $70,957,532 Plus: Construction Loan - Capitalized Interest $5,056,459 $0 $445,073 $4,611,386 Total Capital Costs $131,416,211 $14,767,068 $41,080,225 $75,568,918 (i) Cash Flow from Operations Net Operating Income (NOI) $0 $0 $0 $0 Less: Construction Loan Interest Accrued During Operations $0 $0 $0 $0 Cash Flow from Operations After Interest $0 $0 $0 $0 (ii) TOTAL USES $131,416,211 $14,767,068 $41,080,225 $75,568,918 (i) - (ii) SOURCES Construction Loan Funding Construction Loan: Net Draws $97,356,026 $0 $26,398,495 $70,957,532 Plus: Construction Loan - Net Accrued Interest $5,056,459 $0 $445,073 $4,611,386 Net Construction Loan Funding $102,412,485 $0 $26,843,568 $75,568,918 Plus: Equity Sources $29,003,726 $14,767,068 $14,236,658 $0 Plus: Additional Equity Required $0 $0 $0 $0 Less: Positive Cash Flow After Interest - Distributed $0 $0 $0 $0 Less: Cash Proceeds from Construction Loan Takeout $0 $0 $0 $0 TOTAL SOURCES $131,416,211 $14,767,068 $41,080,225 $75,568,918 TOTAL NET PROJECT COST - INITIAL TO LEASE-UP EQUITY RECONCILIATION Capital Costs Total Development Costs, Excluding Interest $126,359,752 Total Development Cost, Excluding Interest $126,359,752 Plus: Construction Loan - Net Accrued Interest $5,056,459 Interest Accrued During Construction $5,056,459 Total Project Cost (Capital Costs Plus Operating Reserve) $131,416,211 Total Capital Costs $131,416,211 (a) Less: Construction Loan Draws 74.1% $97,356,026 Less: Net Accrued Interest $5,056,459 Operating Reserve Equity Contribution Required $29,003,726 Operating Loss During Lease-Up $0 Interest Accrued During Operating Period $6,207,323 Interest Paid During Operating Period ($4,679,774) Total Operating Reserve Funded by Construction Loan $1,527,549 (b) Total Net Project Costs Total Project Cost (Capital Costs Plus Operating Reserve) $132,943,760 (a) + (b) Less: Positive Cash Flow After Interest $0 Net Project Cost (Through Lease-Up) $132,943,760 Appendix: Page 1 SAMPLE
  14. 14. CLIENT NAME Property Name / Address WATERFALL / PARTNERSHIP STRUCTURE - DEVELOPER TEAM & LP INVESTOR SUMMARY OF CONTRIBUTION & DISTRIBUTION EQUITY Percent DISTRIBUTION Percent Percent PROFIT Percent Percent LP IRR Development Team Equity Pro-Rata $2,900,373 10.00% $6,746,863 10.00% 9.33% $3,846,490 10.00% 8.88% Limited Partner Equity Pro-Rata $26,103,353 90.00% $60,721,763 90.00% 83.99% $34,618,410 90.00% 79.96% 20.7% Subtotal $29,003,726 100.00% $67,468,625 100.00% 93.32% $38,464,899 100.00% 88.85% Development Team Promote $0 0.00% $4,828,670 6.68% $4,828,670 11.15% Total $29,003,726 $72,297,295 100.00% $43,293,570 100.00% PROFORMA SUMMARY Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Levered Cash Flow $43,293,570 ($14,767,068) ($14,236,658) $0 $814,411 $542,879 $70,940,005 $0 $0 Equity Invested $29,003,726 $14,767,068 $14,236,658 $0 $0 $0 $0 $0 $0 Cash Available For Distribution $72,297,295 $0 $0 $0 $814,411 $542,879 $70,940,005 $0 $0 Multiple 2.5x Levered Asset Level IRR 22.5% CASH FLOW DISTRIBUTION Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Tier 1: IRR HURDLE 12.00% Development Team Equity 10.00% ($1,476,707) ($1,423,666) $0 $81,441 $54,288 $4,679,665 $0 $0 Limited Partner Equity 90.00% ($13,290,361) ($12,812,992) $0 $732,970 $488,591 $42,116,989 $0 $0 Total 100.00% $19,150,219 ($14,767,068) ($14,236,658) $0 $814,411 $542,879 $46,796,654 $0 $0 Cash Flow For Next Tier $24,143,351 $0 $0 $0 $0 $0 $24,143,351 $0 $0 Tier 2: BALANCE SPLIT Development Team Equity 8.00% 10.00% $0 $0 $0 $0 $0 $1,931,468 $0 $0 Limited Partner Equity 72.00% 90.00% $0 $0 $0 $0 $0 $17,383,213 $0 $0 Development Team Promote 20.00% $0 $0 $0 $0 $0 $4,828,670 $0 $0 Total 100.00% $24,143,351 $0 $0 $0 $0 $0 $24,143,351 $0 $0 Appendix: Page 2 SAMPLE
  15. 15. CLIENT NAME Property Name / Address WATERFALL / PARTNERSHIP STRUCTURE - DEVELOPER TEAM & LP INVESTOR SUMMARY OF CONTRIBUTION & DISTRIBUTION EQUITY Percent DISTRIBUTION Percent Percent PROFIT Percent Percent LP IRR Development Team Equity Pro-Rata $2,900,373 10.00% $6,746,863 10.00% 9.33% $3,846,490 10.00% 8.88% Limited Partner Equity Pro-Rata $26,103,353 90.00% $60,721,763 90.00% 83.99% $34,618,410 90.00% 79.96% 20.7% Subtotal $29,003,726 100.00% $67,468,625 100.00% 93.32% $38,464,899 100.00% 88.85% Development Team Promote $0 0.00% $4,828,670 6.68% $4,828,670 11.15% Total $29,003,726 $72,297,295 100.00% $43,293,570 100.00% PROFORMA SUMMARY Total Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 RESULT Limited Partner Cash Flow Equity $34,618,410 ($13,290,361) ($12,812,992) $0 $732,970 $488,591 $59,500,202 $0 $0 Equity Draws $26,103,353 $13,290,361 $12,812,992 $0 $0 $0 $0 $0 $0 Distribution $60,721,763 $0 $0 $0 $732,970 $488,591 $59,500,202 $0 $0 Profit: $34,618,410 79.96% Equity: $26,103,353 90.00% Distribution $60,721,763 83.99% Multiple: 2.3x Levered IRR: 20.7% Share of Total Development Team Cash Flow Equity + Promote $8,675,160 ($1,476,707) ($1,423,666) $0 $81,441 $54,288 $11,439,804 $0 $0 Equity Draws $2,900,373 $1,476,707 $1,423,666 $0 $0 $0 $0 $0 $0 Equity Balance $1,476,707 $3,077,577 $3,446,887 $3,779,072 $4,178,273 $0 $0 $0 Distribution $11,575,533 $0 $0 $0 $81,441 $54,288 $11,439,804 $0 $0 Profit: $8,675,160 20.04% Equity: $2,900,373 10.00% Distribution $11,575,533 16.01% Multiple: 4.0x Levered IRR: 35.8% Share of Total Appendix: Page 3 SAMPLE
  16. 16. CLIENT NAME Property Name / Address RENT ROLL & COMPARABLES RENT ROLL Apartment Unit Pricing Number Percent of Area Per Unit Total Area Rent Per SF Monthly Rent Annual Type of Units Total Units RSF / Unit RSF $/RSF/Month $/Unit/Month Rent Studio Market 50 13.9% 400 20,000 $4.50 $1,800 $1,080,000 1 Bed / 1 Bath Market 100 27.8% 610 61,000 $4.10 $2,500 $3,000,000 2 Bed / 2 Bath (T1) Market 100 27.8% 775 77,500 $3.74 $2,900 $3,480,000 2 Bed / 2 Bath (T2) Market 60 16.7% 900 54,000 $3.56 $3,200 $2,304,000 3 Bed / 3 Bath Market 50 13.9% 1,250 62,500 $2.88 $3,600 $2,160,000 Apartment - Subtotal / Average 360 100.0% 764 275,000 $3.64 $2,783 $12,024,000 Other Retail 1 NNN 10 800 8,000 $3.50 $2,800 $336,000 Retail 2 NNN 10 900 9,000 $3.50 $3,150 $378,000 Other - Subtotal 20 17,000 $714,000 Total Rentable Area = 292,000 SF Annual Gross Rent = $12,738,000 50 100 100 60 50 Apartment Units By Type Studio 1 Bed / 1 Bath 2 Bed / 2 Bath (T1) 2 Bed / 2 Bath (T2) 3 Bed / 3 Bath Appendix: Page 6 SAMPLE
  17. 17. CLIENT NAME Property Name / Address RENT ROLL & COMPARABLES RENT COMPARABLES Unit Type Address Property Name Unit Area SF Monthly Rent Weight * Rent / SF Proximity 1 Bed / 1 Bath (2 Beds) xxxx xxxx 689 $3,500 10.0% $5.08 0.20 Mi. 2 Bed / 2 Bath (4 Beds) 1,141 $4,000 10.0% $3.51 3 Bed / 3 Bath (6 Beds) 1,309 $5,500 10.0% $4.20 1 Bed / 1 Bath xxxx xxxx 695 $2,500 5.0% $3.60 1.20 Mi. 1 Bed / 1 Bath xxxx xxxx 773 $2,500 8.0% $3.24 1.60 Mi. 2 Bed / 2 Bath 1,027 $3,500 8.0% $3.41 2 Bed / 2 Bath xxxx xxxx 1,125 $2,875 5.0% $2.56 0.90 Mi. 3 Bed / 2 Bath 1,535 $3,200 5.0% $2.08 Studio xxxx xxxx 450 $1,600 5.0% $3.56 0.80 Mi. 2 Bed / 2 Bath 1,200 $3,000 5.0% $2.50 Studio xxxx xxxx 600 $2,000 5.0% $3.33 0.80 Mi. 2 Bed / 2 Bath 1,000 $3,000 5.0% $3.00 Studio xxxx xxxx 570 $1,900 9.5% $3.33 1.00 Mi. 1 Bed / 1 Bath 700 $2,475 9.5% $3.54 Total / Avg 915 100.0% $3.49 Source: www.apartments.com as of July 2015 * Weight for each comparable is assigned based on potential tenant profile, proximity, size and quality of product SUBMARKET - MARKET RATE RENTAL RESIDENTIAL Item Q1 2015 Q1 2014 Item # of Units Occupancy Rate 95.0% 95.0% Current Inventory 16,600 Rent / SF / Month $3.25 $3.00 Under Construction 7,860 Avg Rent / Month $3,185 $2,940 When Complete 24,460 Source: XYZ Co Proposed 8,810 Appendix: Page 7 SAMPLE
  18. 18. CLIENT NAME Property Name / Address DEVELOPMENT BUDGET ESTIMATED BUILDING GROSS AREA 365,000 SF COST $ Amount PRE-DEVELOPMENT COST (1) Land / Existing Property 1 Land Value / Value of Existing Property $32.88 / SF $12,000,000 2 Real Estate Fees (Broker, Acquisition, Finder) None 0.00% $0.00 / SF $0 3 Title Policy Seller Pays 0.00% $0.00 / SF $0 4 Transfer Taxes Seller Pays 0.00% $0.00 / SF $0 5 Legal / Due Diligence 0.71% $0.23 / SF $85,000 6 Off-Site Improvements 0.28% $0.09 / SF $33,333 7 Miscellaneous Fees 0.14% $0.05 / SF $16,667 Subtotal 1.13% $33.25 / SF $12,135,000 (2) Eng Fees / Entitlement 1 Appraisal Fees $0.41 / SF $150,000 2 Demolition Cost $1.92 / SF $700,000 3 Market Study $0.27 / SF $100,000 4 Planning & Zoning Fee - PUD Approval $0.41 / SF $150,000 5 Lot Line Adjustment - Parcel Maps/Plats $0.27 / SF $100,000 6 Entitlement Consultant w/Planning & Zoning $0.00 / SF $0 7 Financial Consultant $0.07 / SF $25,000 8 Special Development Fees $0.00 / SF $0 9 Traffic Study $0.07 / SF $25,000 10 Geotechnical Survey $0.02 / SF $7,000 11 Environmental Survey - Phase I $0.02 / SF $7,500 12 Environmental Survey - Phase II $0.02 / SF $7,500 13 ALTA Survey $0.03 / SF $10,000 14 Flood Certificate / Inspection Fee $0.00 / SF $0 15 Hazardous Material Remediation $0.00 / SF $0 Subtotal $3.51 / SF $1,282,000 PRE-DEVELOPMENT COSTS % Total: 10.6% $36.76 /SF $13,417,000 HARD COST (1) Building 1 Foundations $19.18 / SF $7,000,000 2 Substructure (Slab on Grade; Basement Excavation; Basement Walls) $35.62 / SF $13,000,000 3 Superstructure (Floor & Roof Construction; Stair Construction) $82.19 / SF $30,000,000 4 Exterior Closure (Walls; Doors/Windows) $19.18 / SF $7,000,000 5 Roofing $2.05 / SF $750,000 6 Interior Construction (Partitions; Interior Finishes; Doors/Windows) $8.22 / SF $3,000,000 7 Elevators $2.14 / SF $780,000 8 Mechanical (Plumbing; HVAC; Fire Protection; Other) $7.40 / SF $2,700,000 9 Electrical $4.66 / SF $1,700,000 10 Equipment (Fixed/Movable Equipment; Furnishings) $1.85 / SF $675,000 Subtotal $182.48 / SF $66,605,000 (2) Parking 1 At Grade Parking 272 Stalls $15,000 / Stall = $4,080,000 2 Below Grade Parking 272 Stalls $35,000 / Stall = $9,520,000 Subtotal 544 Stalls $13,600,000 (3) Sitework Sitework $4,500,000 (4) TIA (Retail / Commercial) Tenant Improvement Allowance 17,000 SF x $20.00 / SF = $340,000 Subtotal $340,000 (5) Contingency Hard Cost Contingency 10.0% $23.30 / SF $8,504,500 HARD COST - CONSTRUCTION % Total: 74.0% $256.30 /SF $93,549,500 Appendix: Page 8 SAMPLE
  19. 19. CLIENT NAME Property Name / Address DEVELOPMENT BUDGET ESTIMATED BUILDING GROSS AREA 365,000 SF COST $ Amount SOFT COST (1) Design & Consultants 1 Architect $4.11 / SF $1,500,000 2 MEP & Fire Protection $1.37 / SF $500,000 3 Structural $1.10 / SF $400,000 4 ADA $0.27 / SF $100,000 5 Surveyor $0.21 / SF $75,000 6 Civil $0.19 / SF $70,000 7 Exterior Skin $0.00 / SF $0 8 Landscaping $0.55 / SF $200,000 9 Restaurant & Kitchen $0.00 / SF $0 10 Roofing & Waterproofing $0.05 / SF $20,000 11 Swimming Pool & Equipment $0.04 / SF $15,000 12 Vertical Transportation $0.03 / SF $10,000 13 Parking $0.08 / SF $30,000 14 Acoustical $0.03 / SF $10,000 15 Audio Visual $0.01 / SF $5,000 16 Telecommunications / Data $0.04 / SF $15,000 17 Security $0.04 / SF $15,000 18 Contingency 5.00% $0.41 / SF $148,250 Subtotal % of HC: 3.33% $8.53 / SF $3,113,250 (2) Miscellaneous Development Cost 1 Site Security During Construction $0.55 / SF $200,000 2 Utility Consumption $0.14 / SF $50,000 3 Drawing / Printing $0.03 / SF $10,000 4 Team Meeting / Catering $0.01 / SF $5,000 Subtotal % of HC: 0.28% $0.73 / SF $265,000 (3) Permits & Fees 1 Building Permit Fee 0.37% $0.96 / SF $349,936 2 Plan Check Fee 0.09% $0.24 / SF $87,484 3 Grading Permit 0.10% $0.26 / SF $93,316 4 Water & Sewer Tap Fees 0.00% $0.00 / SF $0 5 State Imposed Fees 0.00% $0.00 / SF $0 6 School Impact Fees 0.50% $1.28 / SF $466,582 7 Other Misc. Permits & Fees 0.25% $0.64 / SF $233,291 Subtotal % of HC: 1.32% $3.37 / SF $1,230,609 (4) Testing & Inspections 1 Soils Testing $0.05 / SF $20,000 2 Concrete Testing / Reinforcing Inspec $0.04 / SF $15,000 3 Masonry Testing / Inspection $0.04 / SF $15,000 4 Steel Testing / Inspections $0.10 / SF $35,000 5 Fireproofing Testing / Inspections $0.07 / SF $25,000 6 Building Envelope / Window Wall Testing $0.05 / SF $20,000 Subtotal % of HC: 0.14% $0.36 / SF $130,000 (5) Legal & Accounting 1 Due Diligence / Purchase Agreement $0.14 / SF $50,000 2 Development / Construction Agreement $0.08 / SF $30,000 3 Consultant / Broker Agrmt / CC&Rs $0.08 / SF $30,000 4 Real Estate Tax Consultant / Audits / Accounting $0.05 / SF $20,000 5 Miscellaneous $0.01 / SF $5,000 Subtotal % of HC: 0.14% $0.37 / SF $135,000 Appendix: Page 9 SAMPLE
  20. 20. CLIENT NAME Property Name / Address DEVELOPMENT BUDGET ESTIMATED BUILDING GROSS AREA 365,000 SF COST $ Amount (6) Insurance During Construction 1 Builders Risk Insurance (Hard Cost) Based on HC $0.30 /$100/Yr x 24 Mths $561,297 2 Builders Risk Insurance (Soft Cost) Based on SC $0.35 /$100/Yr x 24 Mths $36,552 3 General Liablility Wrap-up Policy % of HC 1.50% $1,403,243 4 Earthquake Insurance % of HC 0.00% $0 5 Professional Insurance - e.g.: CPPIC $50,000 6 Commercial Umbrella w/Constructn $0 7 Force Majeure w/Owner $0 Subtotal % of HC: 2.19% $5.62 / SF $2,051,091 (7) Taxes During Construction 1 Property Taxes 1.25% $1.58 / SF $577,728 2 Sales Tax w/Constructn $0.00 / SF $0 Subtotal % of HC: 0.62% $1.58 / SF $577,728 (8) Marketing / Leasing Office 1 Leasing Office (Staff/Equip/Furn/Trailer) $0.14 / SF $50,000 2 Model Room Construction $0.21 / SF $75,000 3 Model Room Furniture $0.07 / SF $25,000 4 Marketing (Print/Media Advt/PR) $0.14 / SF $50,000 5 Leasing Commissions (Retail/Commercial) 4.00% 60 Mths $0.39 / SF $142,800 6 Other $0.01 / SF $5,000 Subtotal % of HC: 0.37% $0.95 / SF $347,800 (9) Developer, Contractor, PM Fees & Escalations 1 Developer / Contractor Fee 6.0% $15.38 / SF $5,612,970 2 Project Management Fee (Hard Cost, Net of Contingency) 2.0% $4.66 / SF $1,700,900 3 Escalations 3.3% $9.06 / SF $3,305,416 Subtotal % of HC: 11.35% $29.09 / SF $10,619,286 (10) Soft Cost Contingency Soft Cost Contingency 5.0% $2.53 / SF $923,488 SOFT COST % Total: 15.3% $53.13 /SF $19,393,252 TOTAL COST, PRE-FINANCING 100.0% $346.19 /SF $126,359,752 Appendix: Page 10 SAMPLE
  21. 21. CLIENT NAME Property Name / Address PROFORMA ANNUAL CASH FLOW TOTAL Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 LEASE-UP Stabilized Sale DEVELOPMENT COST Pre-Development Cost $13,417,000 $13,417,000 $0 $0 $0 $0 $0 $0 $0 Hard Cost $93,549,500 $7,800 $35,201,923 $58,339,776 $0 $0 $0 $0 $0 Soft Cost $19,393,252 $1,342,268 $5,433,229 $12,617,755 $0 $0 $0 $0 $0 $126,359,752 $14,767,068 $40,635,153 $70,957,532 $0 $0 $0 $0 $0 OPERATING CASH FLOW Yr 5 Onwards Yr 4 - $/SF/Mo Yr 1-7 Total Gross Potential Revenue 3.00% $3.53 $63,837,049 $0 $0 $0 $12,024,000 $12,384,720 $12,756,262 $13,138,949 $13,533,118 Less: Loss-to-Lease 0.25% $0.00 $98,571 $0 $0 $0 $0 $0 $31,891 $32,847 $33,833 Less: Vacancy 5.00% $0.18 $5,897,252 $0 $0 $0 $3,306,600 $619,236 $637,813 $656,947 $676,656 Less: Concessions, Allowance, Bad Debt 0.50% $0.02 $319,185 $0 $0 $0 $60,120 $61,924 $63,781 $65,695 $67,666 Effective Rental Income $3.34 $57,522,040 $0 $0 $0 $8,657,280 $11,703,560 $12,022,777 $12,383,460 $12,754,964 Other Income 3.00% $0.04 $665,384 $0 $0 $0 $106,920 $133,488 $137,493 $141,617 $145,866 Effective Gross Income (EGI) $3.38 $58,187,424 $0 $0 $0 $8,764,200 $11,837,048 $12,160,269 $12,525,077 $12,900,830 Operating Expenses 3.00% $1.14 $20,513,374 $0 $0 $0 $3,787,665 $3,997,897 $4,117,834 $4,241,369 $4,368,610 Net Operating Income - Apartments $2.24 $37,674,051 $0 $0 $0 $4,976,535 $7,839,152 $8,042,436 $8,283,709 $8,532,220 Net Other Income - Retail 3.00% $0.20 $3,440,537 $0 $0 $0 $517,650 $698,649 $719,608 $741,197 $763,433 Net Operating Income (NOI) $2.44 $41,114,587 $0 $0 $0 $5,494,185 $8,537,801 $8,762,044 $9,024,905 $9,295,652 Less: Construction Interest Paid During Operations $4,679,774 $0 $0 $0 $4,679,774 $0 $0 $0 $0 Less: Annual Debt Service $13,391,342 $0 $0 $0 $0 $6,695,671 $6,695,671 $0 $0 Plus: Operating Reserve Funded by Construction Loan $0 $0 $0 $0 $0 $0 $0 $0 $0 Levered Cash Flow Before Tax - From Operations $4,722,914 $0 $0 $0 $814,411 $1,842,130 $2,066,373 $0 $0 Cash-on-Cash Yield 2.8% 6.4% 7.1% EQUITY Equity - Initial ($29,003,726) ($14,767,068) ($14,236,658) $0 $0 $0 $0 $0 $0 Equity - Additional Required $0 $0 $0 $0 $0 $0 $0 $0 $0 Equity - Initial and Additional Required ($29,003,726) ($14,767,068) ($14,236,658) $0 $0 $0 $0 $0 $0 CONSTRUCTION LOAN Loan Draw - Net Funded $97,356,026 $0 $26,398,495 $70,957,532 $0 $0 $0 $0 $0 Interest Accrued - Net $6,584,008 $0 $445,073 $4,611,386 $1,527,549 $0 $0 $0 $0 Construction Loan Ending Balance $103,940,035 $0 $26,843,568 $102,412,485 $103,940,035 $0 $0 $0 $0 Net Cash Flow After Debt $814,411 $0 $0 $0 $814,411 $0 $0 $0 $0 Development Cost, Excluding Construction Loan Interest and Operating Reserves DEVELOPMENT PERIOD OPERATING PERIOD Appendix: Page 11 SAMPLE
  22. 22. CLIENT NAME Property Name / Address PROFORMA ANNUAL CASH FLOW TOTAL Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 LEASE-UP Stabilized Sale DEVELOPMENT PERIOD OPERATING PERIOD PERMANENT FINANCING Month Start 0 0 0 0 1 13 0 0 Max Loan Amount Per Stabilized Value $106,029,020 Month End 0 0 0 0 12 24 0 0 Construction Loan Ending Balance $103,940,035 Loan Draw $103,940,035 $0 $0 $0 $0 $103,940,035 $0 $0 $0 Permanent Loan Amount * $103,940,035 Loan Fees $1,299,250 $0 $0 $0 $0 $1,299,250 $0 $0 $0 * Minimum of Max Loan & Construction Loan Ending Bal. Debt Service / Year $13,391,342 $0 $0 $0 $0 $6,695,671 $6,695,671 $0 $0 Debt Service / Month $0 $0 $0 $0 $557,973 $557,973 $0 $0 Proceeds from Construction Takeout $0 Opening Loan Balance $0 $0 $0 $0 $103,940,035 $102,406,539 $0 $0 Interest Paid / Year $10,245,895 $0 $0 $0 $0 $5,162,176 $5,083,719 $0 $0 Interest Rate 5.00% Principal Paid / Year $3,145,447 $0 $0 $0 $0 $1,533,495 $1,611,952 $0 $0 Amortization 30.00 Yrs Closing Loan Balance $0 $0 $0 $0 $102,406,539 $100,794,588 $0 $0 Loan Fees 1.25% Loan Payoff $100,794,588 $0 $0 $0 $0 $0 $100,794,588 $0 $0 Financing - Beginning of Year 4 Cash Proceeds from Refinancing $0 $0 $0 $0 $0 $0 $0 $0 $0 Debt Service Coverage 1.29x na na na 1.28x 1.31x na na Debt Yield Ratio 8.4% na na 8.3% 8.6% na na REVERSION Sale In Exit Cap Rate Price Per Unit Sale Price Year 5 5.00% $501,384 $180,498,106 $0 $0 $0 $180,498,106 $0 $0 Less: Cost of Sale 6.00% $10,829,886 $0 $0 $0 $10,829,886 $0 $0 Adjusted Sale Price $169,668,220 $0 $0 $0 $169,668,220 $0 $0 Less: Loan Payoff / Remaining Mortgage Balance $100,794,588 $0 $0 $0 $100,794,588 $0 $0 Levered Cash Flow Before Tax - From Sale $68,873,632 $0 $0 $0 $68,873,632 $0 $0 Unlevered Cash Flow $66,102,497 ($14,767,068) ($40,635,153) ($70,957,532) $5,494,185 $8,537,801 $178,430,264 $0 $0 Levered Cash Flow $43,293,570 ($14,767,068) ($14,236,658) $0 $814,411 $542,879 $70,940,005 $0 $0 Appendix: Page 12 SAMPLE
  23. 23. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW Time 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 PRE-DEV DEVELOPMENT COSTS TOTAL Land / Existing Property $12,135,000 $12,135,000 $0 $0 $0 $0 $0 $0 $0 $0 Eng Fees / Entitlement $1,282,000 $1,282,000 $0 $0 $0 $0 $0 $0 $0 $0 PRE-DEVELOPMENT COSTS $13,417,000 $13,417,000 $0 $0 $0 $0 $0 $0 $0 $0 Building $66,605,000 $0 $173,147 $647,126 $2,930,089 $11,056,738 $23,782,688 $19,506,141 $6,864,035 $1,645,036 Parking $13,600,000 $0 $5,036,023 $8,563,977 $0 $0 $0 $0 $0 $0 Sitework $4,500,000 $0 $4,500,000 $0 $0 $0 $0 $0 $0 $0 TIA (Retail / Commercial) $340,000 $0 $0 $0 $0 $0 $0 $0 $34,144 $305,856 Contingency $8,504,500 $7,800 $27,047 $119,147 $495,488 $1,653,141 $3,026,751 $2,211,837 $769,626 $193,663 HARD COST - CONSTRUCTION $93,549,500 $7,800 $9,736,218 $9,330,249 $3,425,577 $12,709,879 $26,809,439 $21,717,978 $7,667,805 $2,144,555 Design & Consultants $3,113,250 $2,426 $9,629 $41,605 $174,702 $591,878 $1,108,554 $825,041 $287,619 $71,796 Miscellaneous Development Cost $265,000 $8,646 $25,959 $26,500 $28,713 $35,519 $43,595 $38,804 $30,325 $26,939 Permits & Fees $1,230,609 $1,230,609 $0 $0 $0 $0 $0 $0 $0 $0 Testing & Inspections $130,000 $10,000 $10,244 $1,730 $11,467 $31,213 $17,678 $10,631 $30,504 $6,535 Legal & Accounting $135,000 $80,000 $3,125 $3,125 $3,125 $3,125 $3,125 $18,125 $18,125 $3,125 Insurance During Construction $2,051,091 $0 $256,386 $256,386 $256,386 $256,386 $256,386 $256,386 $256,386 $256,386 Taxes During Construction $577,728 $0 $72,216 $72,216 $72,216 $72,216 $72,216 $72,216 $72,216 $72,216 Marketing / Leasing Office $347,800 $0 $625 $625 $625 $625 $86,325 $86,325 $86,325 $86,325 Developer, Contractor, PM Fees & Escalations $10,619,286 $9,740 $33,773 $148,774 $618,700 $2,064,222 $3,779,403 $2,761,847 $961,007 $241,820 Soft Cost Contingency $923,488 $847 $2,937 $12,938 $53,804 $179,512 $328,669 $240,179 $83,572 $21,029 SOFT COST $19,393,252 $1,342,268 $414,895 $563,900 $1,219,738 $3,234,696 $5,695,951 $4,309,554 $1,826,079 $786,172 $126,359,752 $14,767,068 $10,151,113 $9,894,150 $4,645,315 $15,944,574 $32,505,390 $26,027,532 $9,493,883 $2,930,726 TOTAL COST, PRE-FINANCING , EXCLUDING CONSTRUCTION LOAN INTEREST AND OPERATING RESERVES DEVELOPMENT Appendix: Page 13 SAMPLE
  24. 24. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW DEVELOPMENT COSTS TOTAL Land / Existing Property $12,135,000 Eng Fees / Entitlement $1,282,000 PRE-DEVELOPMENT COSTS $13,417,000 Building $66,605,000 Parking $13,600,000 Sitework $4,500,000 TIA (Retail / Commercial) $340,000 Contingency $8,504,500 HARD COST - CONSTRUCTION $93,549,500 Design & Consultants $3,113,250 Miscellaneous Development Cost $265,000 Permits & Fees $1,230,609 Testing & Inspections $130,000 Legal & Accounting $135,000 Insurance During Construction $2,051,091 Taxes During Construction $577,728 Marketing / Leasing Office $347,800 Developer, Contractor, PM Fees & Escalations $10,619,286 Soft Cost Contingency $923,488 SOFT COST $19,393,252 $126,359,752 TOTAL COST, PRE-FINANCING , EXCLUDING CONSTRUCTION LOAN INTEREST AND OPERATING RESERVES Quarter 9 Quarter 10 Quarter 11 Quarter 12 Quarter 13 Quarter 14 Quarter 15 Quarter 16 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 LEASE-UP FIRST STABILIZED YEAR Appendix: Page 14 SAMPLE
  25. 25. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW Time 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 PRE-DEV DEVELOPMENT OPERATING INCOME / (LOSS) Total Number of Apartment Units 360 Units PreLease Start: Quarter 8 Pre Leasing Apartments Leased Per Quarter 108 # PreLd Occ at Open: 30.00% 0 0 0 0 0 0 0 108 Cumulative Apartments Leased 84 Units/Qtr To Stabilization: 3 Quarters 0 0 0 0 0 0 0 108 Vacancy Due to Lease-Up (% of Gross Potential) - (Qtr-to-Qtr Avg) 85.0% Stabilized Vacancy (% of Gross Potential) 5.00% 0.0% Overall Apartment Vacancy Rate (% of Gross Potential) 85.0% Gross Potential Revenue Gross Annual Rent Escalation Less: Loss-to-Lease Loss-to-Lease as % of Gross Potential Rent Less: Vacancy Vacancy as % of Gross Potential Rent Less: Concessions, Allowance, Bad Debt Other as % of Gross Potential Rent Effective Rental Income Other Income Pet Fee & Cable Income $25.00/Mo Pay Rate = 30.00% Parking Income $75.00/Mo Pay Rate = 30.00% Miscellaneous Income Other Income Effective Gross Income (EGI) Appendix: Page 15 SAMPLE
  26. 26. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW OPERATING INCOME / (LOSS) Total Number of Apartment Units 360 Units PreLease Start: Quarter 8 Apartments Leased Per Quarter 108 # PreLd Occ at Open: 30.00% Cumulative Apartments Leased 84 Units/Qtr To Stabilization: 3 Quarters Vacancy Due to Lease-Up (% of Gross Potential) - (Qtr-to-Qtr Avg) Stabilized Vacancy (% of Gross Potential) 5.00% Overall Apartment Vacancy Rate (% of Gross Potential) Gross Potential Revenue Gross Annual Rent Escalation Less: Loss-to-Lease Loss-to-Lease as % of Gross Potential Rent Less: Vacancy Vacancy as % of Gross Potential Rent Less: Concessions, Allowance, Bad Debt Other as % of Gross Potential Rent Effective Rental Income Other Income Pet Fee & Cable Income $25.00/Mo Pay Rate = 30.00% Parking Income $75.00/Mo Pay Rate = 30.00% Miscellaneous Income Other Income Effective Gross Income (EGI) Quarter 9 Quarter 10 Quarter 11 Quarter 12 Quarter 13 Quarter 14 Quarter 15 Quarter 16 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4 LEASE-UP FIRST STABILIZED YEAR 84 84 84 0 0 0 0 0 192 276 360 360 360 360 360 360 58.3% 35.0% 11.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 5.0% 5.0% 5.0% 5.0% 5.0% 58.3% 35.0% 11.7% 5.0% 5.0% 5.0% 5.0% 5.0% $3,006,000 $3,006,000 $3,006,000 $3,006,000 $3,096,180 $3,096,180 $3,096,180 $3,096,180 0.00% 0.00% 0.00% 3.00% 0.00% 0.00% 0.00% $0 $0 $0 $0 $0 $0 $0 $0 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% $1,753,500 $1,052,100 $350,700 $150,300 $154,809 $154,809 $154,809 $154,809 58.3% 35.0% 11.7% 5.0% 5.0% 5.0% 5.0% 5.0% $15,030 $15,030 $15,030 $15,030 $15,481 $15,481 $15,481 $15,481 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% $1,237,470 $1,938,870 $2,640,270 $2,840,670 $2,925,890 $2,925,890 $2,925,890 $2,925,890 $4,320 $6,210 $8,100 $8,100 $8,343 $8,343 $8,343 $8,343 $12,960 $18,630 $24,300 $24,300 $25,029 $25,029 $25,029 $25,029 $0 $0 $0 $0 $0 $0 $0 $0 $17,280 $24,840 $32,400 $32,400 $33,372 $33,372 $33,372 $33,372 $1,254,750 $1,963,710 $2,672,670 $2,873,070 $2,959,262 $2,959,262 $2,959,262 $2,959,262 Appendix: Page 16 SAMPLE
  27. 27. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW Time 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 PRE-DEV DEVELOPMENT Operating Expenses Controllable Expenses Payroll $1,300 / Unit / Year R&M $200 / Unit / Year Turnover $210 / Unit / Year Recreational Amenities $100 / Unit / Year Contracts & Landscaping $1,250 / Unit / Year Leasing / Marketing $200 / Unit / Year Admin (Office, Other G&A) $250 / Unit / Year Utilities $600 / Unit / Year Controllable - Subtotal Non-Controllable Real Estate Taxes 1.250% of Project Cost Insurance - Property $800 / Unit / Year Management Fees 4.00% of EGI - (Property + Asset Management) Reserves $250 / Unit / Year Non-Controllable - Subtotal Total Operating Expenses Operating Expenses as % of EGI Net Operating Income (NOI) - Apartments Other Income (NNN) - Retail Retail Vacancy Rate Net Income - Retail Net Operating Income (NOI) Net Cash Flow Before Debt - Initial to Stabilization ($14,767,068) ($10,151,113) ($9,894,150) ($4,645,315) ($15,944,574) ($32,505,390) ($26,027,532) ($9,493,883) ($2,930,726) Appendix: Page 17 SAMPLE
  28. 28. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW Operating Expenses Controllable Expenses Payroll $1,300 / Unit / Year R&M $200 / Unit / Year Turnover $210 / Unit / Year Recreational Amenities $100 / Unit / Year Contracts & Landscaping $1,250 / Unit / Year Leasing / Marketing $200 / Unit / Year Admin (Office, Other G&A) $250 / Unit / Year Utilities $600 / Unit / Year Controllable - Subtotal Non-Controllable Real Estate Taxes 1.250% of Project Cost Insurance - Property $800 / Unit / Year Management Fees 4.00% of EGI - (Property + Asset Management) Reserves $250 / Unit / Year Non-Controllable - Subtotal Total Operating Expenses Operating Expenses as % of EGI Net Operating Income (NOI) - Apartments Other Income (NNN) - Retail Retail Vacancy Rate Net Income - Retail Net Operating Income (NOI) Net Cash Flow Before Debt - Initial to Stabilization Quarter 9 Quarter 10 Quarter 11 Quarter 12 Quarter 13 Quarter 14 Quarter 15 Quarter 16 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4 LEASE-UP FIRST STABILIZED YEAR $117,000 $117,000 $117,000 $117,000 $120,510 $120,510 $120,510 $120,510 $18,000 $18,000 $18,000 $18,000 $18,540 $18,540 $18,540 $18,540 $18,900 $18,900 $18,900 $18,900 $19,467 $19,467 $19,467 $19,467 $9,000 $9,000 $9,000 $9,000 $9,270 $9,270 $9,270 $9,270 $112,500 $112,500 $112,500 $112,500 $115,875 $115,875 $115,875 $115,875 $18,000 $18,000 $18,000 $18,000 $18,540 $18,540 $18,540 $18,540 $22,500 $22,500 $22,500 $22,500 $23,175 $23,175 $23,175 $23,175 $54,000 $54,000 $54,000 $54,000 $55,620 $55,620 $55,620 $55,620 $369,900 $369,900 $369,900 $369,900 $380,997 $380,997 $380,997 $380,997 $394,874 $394,874 $394,874 $394,874 $402,772 $402,772 $402,772 $402,772 $72,000 $72,000 $72,000 $72,000 $74,160 $74,160 $74,160 $74,160 $50,190 $78,548 $106,907 $114,923 $118,370 $118,370 $118,370 $118,370 $22,500 $22,500 $22,500 $22,500 $23,175 $23,175 $23,175 $23,175 $539,564 $567,923 $596,281 $604,297 $618,477 $618,477 $618,477 $618,477 $909,464 $937,823 $966,181 $974,197 $999,474 $999,474 $999,474 $999,474 72.5% 47.8% 36.2% 33.9% 33.8% 33.8% 33.8% 33.8% $345,286 $1,025,887 $1,706,489 $1,898,873 $1,959,788 $1,959,788 $1,959,788 $1,959,788 $178,500 $178,500 $178,500 $178,500 $183,855 $183,855 $183,855 $183,855 58.3% 35.0% 11.7% 5.0% 5.0% 5.0% 5.0% 5.0% $74,375 $116,025 $157,675 $169,575 $174,662 $174,662 $174,662 $174,662 $419,661 $1,141,912 $1,864,164 $2,068,448 $2,134,450 $2,134,450 $2,134,450 $2,134,450 $419,661 $1,141,912 $1,864,164 $2,068,448 $2,134,450 $2,134,450 $2,134,450 $2,134,450 Appendix: Page 18 SAMPLE
  29. 29. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW Time 0 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Quarter 7 Quarter 8 Year 1 Year 1 Year 1 Year 1 Year 2 Year 2 Year 2 Year 2 PRE-DEV DEVELOPMENT TOTAL A] Estimated Construction Interest Max Construction Loan Estimate $106,029,020 Construction Interest - Annual Rate 6.00% Construction Period 24 Months Average Draw 60.00% Est. Construction Loan Interest $7,634,089 Total Project Cost (Before Operating Reserve) (a) $133,993,842 B] Estimated Operating Reserve (During Lease-Up) Lease-Up Period (Months until Stabilization) 9 Months Estimated EGI During Lease-Up $6,573,150 Estimated OpEx During Lease-Up $2,840,749 NOI During Lease-Up $3,732,401 (i) Est. Construction Interest During Lease-Up $4,771,306 (ii) Operating Reserve Required (During Lease-Up) (b) = (ii)-(i) $1,038,905 Estimated Total Project Costs (a) + (b) $135,032,746 Maximum Loan Balance $106,029,020 Equity Required $29,003,726 $14,767,068 $10,151,113 $4,085,545 $0 $0 $0 $0 $0 $0 C] Construction Loan Account and Interest Calculation Beginning Balance (i) $0 $0 $5,852,170 $10,620,107 $26,843,568 $59,995,401 $87,118,071 $97,989,930 (a) Loan Draw & Releases Construction Draw - Initial Request (ii) $97,356,026 $0 $0 $5,808,605 $4,645,315 $15,944,574 $32,505,390 $26,027,532 $9,493,883 $2,930,726 Operating Deficit (iii) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Trial Balance (i)+(ii)+(iii) = (iv) $103,940,035 $0 $0 $5,808,605 $10,497,485 $26,564,682 $59,348,957 $86,022,933 $96,611,954 $100,920,656 Additional Equity Required (v) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Construction Draw - Net Funded (iv)+(v)-(i) = $97,356,026 $0 $0 $5,808,605 $4,645,315 $15,944,574 $32,505,390 $26,027,532 $9,493,883 $2,930,726 Ending Balance Before Interest (iv) + (v) = (vi) $0 $0 $5,808,605 $10,497,485 $26,564,682 $59,348,957 $86,022,933 $96,611,954 $100,920,656 Avg Loan Balance Before Interest [(i)+(vi)] / 2 = (vii) $0 $0 $2,904,303 $8,174,827 $18,592,395 $43,096,262 $73,009,167 $91,865,013 $99,455,293 (b) Total Construction Loan Interest 6.00% $0 $0 $43,565 $122,622 $278,886 $646,444 $1,095,138 $1,377,975 $1,491,829 Interest Accrued During Construction Period (viii) $5,056,459 $0 $0 $43,565 $122,622 $278,886 $646,444 $1,095,138 $1,377,975 $1,491,829 Interest Accrued During Operating Period (ix) $6,207,323 $0 $0 $0 $0 $0 $0 $0 $0 $0 Interest Paid from Operations (x) ($4,679,774) $0 $0 $0 $0 $0 $0 $0 $0 $0 Trial Ending Balance (vi)+(viii)+(ix)+(x) = (xi) $103,940,035 $0 $0 $5,852,170 $10,620,107 $26,843,568 $59,995,401 $87,118,071 $97,989,930 $102,412,485 Additional Equity Required (xii) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Interest Accrued - Net (viii)+(ix)+(x)+(xii) = (xiii) $6,584,008 $0 $0 $43,565 $122,622 $278,886 $646,444 $1,095,138 $1,377,975 $1,491,829 Ending Balance (xi)+(xii) = (xiv) $103,940,035 $0 $0 $5,852,170 $10,620,107 $26,843,568 $59,995,401 $87,118,071 $97,989,930 $102,412,485 Total Additional Equity Required (v)+(xii) = (xv) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Cash Flow After Debt (Year 1 to Year 3) $814,411 $0 $0 $0 $0 $0 $0 $0 $0 $0 Appendix: Page 19 SAMPLE
  30. 30. CLIENT NAME Property Name / Address PROFORMA QUARTERLY CASH FLOW TOTAL A] Estimated Construction Interest Max Construction Loan Estimate $106,029,020 Construction Interest - Annual Rate 6.00% Construction Period 24 Months Average Draw 60.00% Est. Construction Loan Interest $7,634,089 Total Project Cost (Before Operating Reserve) (a) $133,993,842 B] Estimated Operating Reserve (During Lease-Up) Lease-Up Period (Months until Stabilization) 9 Months Estimated EGI During Lease-Up $6,573,150 Estimated OpEx During Lease-Up $2,840,749 NOI During Lease-Up $3,732,401 (i) Est. Construction Interest During Lease-Up $4,771,306 (ii) Operating Reserve Required (During Lease-Up) (b) = (ii)-(i) $1,038,905 Estimated Total Project Costs (a) + (b) $135,032,746 Maximum Loan Balance $106,029,020 Equity Required $29,003,726 C] Construction Loan Account and Interest Calculation Beginning Balance (i) (a) Loan Draw & Releases Construction Draw - Initial Request (ii) $97,356,026 Operating Deficit (iii) $0 Trial Balance (i)+(ii)+(iii) = (iv) $103,940,035 Additional Equity Required (v) $0 Construction Draw - Net Funded (iv)+(v)-(i) = $97,356,026 Ending Balance Before Interest (iv) + (v) = (vi) Avg Loan Balance Before Interest [(i)+(vi)] / 2 = (vii) (b) Total Construction Loan Interest 6.00% Interest Accrued During Construction Period (viii) $5,056,459 Interest Accrued During Operating Period (ix) $6,207,323 Interest Paid from Operations (x) ($4,679,774) Trial Ending Balance (vi)+(viii)+(ix)+(x) = (xi) $103,940,035 Additional Equity Required (xii) $0 Interest Accrued - Net (viii)+(ix)+(x)+(xii) = (xiii) $6,584,008 Ending Balance (xi)+(xii) = (xiv) $103,940,035 Total Additional Equity Required (v)+(xii) = (xv) $0 Net Cash Flow After Debt (Year 1 to Year 3) $814,411 Quarter 9 Quarter 10 Quarter 11 Quarter 12 Quarter 13 Quarter 14 Quarter 15 Quarter 16 Year 3 Year 3 Year 3 Year 3 Year 4 Year 4 Year 4 Year 4 LEASE-UP FIRST STABILIZED YEAR $0 $0 $0 $0 $102,412,485 $103,529,012 $103,940,035 $103,940,035 $0 $0 $0 $0 $0 $0 $0 $0 $102,412,485 $103,529,012 $103,940,035 $103,940,035 $0 $0 $0 $0 $0 $0 $0 $0 $102,412,485 $103,529,012 $103,940,035 $103,940,035 $102,412,485 $103,529,012 $103,940,035 $103,940,035 $1,536,187 $1,552,935 $1,559,101 $1,559,101 $0 $0 $0 $0 $1,536,187 $1,552,935 $1,559,101 $1,559,101 ($419,661) ($1,141,912) ($1,559,101) ($1,559,101) $103,529,012 $103,940,035 $103,940,035 $103,940,035 $0 $0 $0 $0 $1,116,527 $411,023 $0 $0 $103,529,012 $103,940,035 $103,940,035 $103,940,035 $0 $0 $0 $0 $0 $0 $305,063 $509,347 Notes: Construction Loan Account and Interest Calculation (i) Construction Draws are provided by the lender as construction progresses. In the event that the draw request, together with the carried balance of the construction loan, exceeds the maximum draw limit, then additional equity is required to maintain the construction loan balance at the maximum draw limit. The net construction draw amount is the amount borrowed after additional equity is contributed, if any. Also note that any operating deficits that need to be funded by the lender are requested and included as part of the draw. (ii) Accrued interest is added to the overall balance of the construction loan. In the event that the accrued interest, together with the carried balance of the construction loan, exceeds the maximum draw limit, then additional equity is required to maintain the construction loan balance at the maximum draw limit. The net accrued interest amount is the amount accrued after additional equity is contributed, if any. Appendix: Page 20 SAMPLE
  31. 31. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 PRE-DEVELOPMENT COST (1) Land / Existing Property 1 1 Land Value / Value of Existing Property $12,000,000 $12,000,000 $0 $0 $0 $0 $0 $0 2 2 Real Estate Fees (Broker, Acquisition, Finder) None $0 $0 $0 $0 $0 $0 $0 $0 3 3 Title Policy Seller Pays $0 $0 $0 $0 $0 $0 $0 $0 5 4 Transfer Taxes Seller Pays $0 $0 $0 $0 $0 $0 $0 $0 7 5 Legal / Due Diligence $85,000 $85,000 $0 $0 $0 $0 $0 $0 8 6 Off-Site Improvements $33,333 $33,333 $0 $0 $0 $0 $0 $0 9 7 Miscellaneous Fees $16,667 $16,667 $0 $0 $0 $0 $0 $0 10 Subtotal $12,135,000 $12,135,000 $0 $0 $0 $0 $0 $0 11 12 (2) Eng Fees / Entitlement 13 1 Appraisal Fees $150,000 $150,000 $0 $0 $0 $0 $0 $0 14 2 Demolition Cost $700,000 $700,000 $0 $0 $0 $0 $0 $0 15 3 Market Study $100,000 $100,000 $0 $0 $0 $0 $0 $0 16 4 Planning & Zoning Fee - PUD Approval $150,000 $150,000 $0 $0 $0 $0 $0 $0 17 5 Lot Line Adjustment - Parcel Maps/Plats $100,000 $100,000 $0 $0 $0 $0 $0 $0 18 6 Entitlement Consultant w/Planning & Zoning $0 $0 $0 $0 $0 $0 $0 $0 19 7 Financial Consultant $25,000 $25,000 $0 $0 $0 $0 $0 $0 20 8 Special Development Fees $0 $0 $0 $0 $0 $0 $0 $0 21 9 Traffic Study $25,000 $25,000 $0 $0 $0 $0 $0 $0 22 10 Geotechnical Survey $7,000 $7,000 $0 $0 $0 $0 $0 $0 23 11 Environmental Survey - Phase I $7,500 $7,500 $0 $0 $0 $0 $0 $0 24 12 Environmental Survey - Phase II $7,500 $7,500 $0 $0 $0 $0 $0 $0 25 13 ALTA Survey $10,000 $10,000 $0 $0 $0 $0 $0 $0 26 14 Flood Certificate / Inspection Fee $0 $0 $0 $0 $0 $0 $0 $0 27 15 Hazardous Material Remediation $0 $0 $0 $0 $0 $0 $0 $0 28 Subtotal $1,282,000 $1,282,000 $0 $0 $0 $0 $0 $0 29 30 PRE-DEVELOPMENT COSTS $13,417,000 $13,417,000 $0 $0 $0 $0 $0 $0 31 32 HARD COST 33 34 (1) Building ## 1 Foundations $7,000,000 $0 $6,420 $4,391 $7,386 $12,410 $20,812 $34,789 2 Substructure (Slab on Grade; Basement Excavation; Basement Walls) $13,000,000 $0 $11,923 $8,155 $13,717 $23,048 $38,651 $64,608 3 Superstructure (Floor & Roof Construction; Stair Construction) $30,000,000 $0 $27,516 $18,818 $31,655 $53,187 $89,193 $149,096 4 Exterior Closure (Walls; Doors/Windows) $7,000,000 $0 $6,420 $4,391 $7,386 $12,410 $20,812 $34,789 5 Roofing $750,000 $0 $688 $470 $791 $1,330 $2,230 $3,727 6 Interior Construction (Partitions; Interior Finishes; Doors/Windows) $3,000,000 $0 $2,752 $1,882 $3,165 $5,319 $8,919 $14,910 7 Elevators $780,000 $0 $715 $489 $823 $1,383 $2,319 $3,876 8 Mechanical (Plumbing; HVAC; Fire Protection; Other) $2,700,000 $0 $2,476 $1,694 $2,849 $4,787 $8,027 $13,419 9 Electrical $1,700,000 $0 $1,559 $1,066 $1,794 $3,014 $5,054 $8,449 10 Equipment (Fixed/Movable Equipment; Furnishings) $675,000 $0 $619 $423 $712 $1,197 $2,007 $3,355 ## Subtotal $66,605,000 $0 $61,089 $41,779 $70,279 $118,083 $198,024 $331,018 ## ## (2) Parking ## 1 At Grade Parking $4,080,000 $0 $3,742 $1,100,932 $2,975,326 $0 $0 $0 ## 2 Below Grade Parking $9,520,000 $0 $8,732 $86,648 $860,644 $4,313,666 $3,651,824 $598,487 ## Subtotal $13,600,000 $0 $12,474 $1,187,580 $3,835,969 $4,313,666 $3,651,824 $598,487 ## ## (3) Sitework ## Sitework $4,500,000 $0 $4,127 $1,214,264 $3,281,609 $0 $0 $0 ## ## (4) TIA (Retail / Commercial) ## Tenant Improvement Allowance $340,000 $0 $0 $0 $0 $0 $0 $0 ## Subtotal $340,000 $0 $0 $0 $0 $0 $0 $0 (5) Contingency Hard Cost Contingency $8,504,500 $7,800 $5,053 $8,317 $13,678 $22,455 $36,765 $59,926 ## ## HARD COST - CONSTRUCTION $93,549,500 $7,800 $82,743 $2,451,940 $7,201,535 $4,454,204 $3,886,613 $989,432 ## Appendix: Page 21 SAMPLE
  32. 32. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 ## SOFT COST ## ## (1) Design & Consultants ## 1 Architect $1,500,000 $1,376 $891 $1,467 $2,412 $3,961 $6,485 $10,570 ## 2 MEP & Fire Protection $500,000 $459 $297 $489 $804 $1,320 $2,162 $3,523 ## 3 Structural $400,000 $367 $238 $391 $643 $1,056 $1,729 $2,819 ## 4 ADA $100,000 $92 $59 $98 $161 $264 $432 $705 ## 5 Surveyor $75,000 $69 $45 $73 $121 $198 $324 $528 ## 6 Civil $70,000 $64 $42 $68 $113 $185 $303 $493 ## 7 Exterior Skin $0 $0 $0 $0 $0 $0 $0 $0 ## 8 Landscaping $200,000 $0 $183 $125 $211 $355 $595 $994 ## 9 Restaurant & Kitchen $0 $0 $0 $0 $0 $0 $0 $0 ## 10 Roofing & Waterproofing $20,000 $0 $18 $13 $21 $35 $59 $99 ## 11 Swimming Pool & Equipment $15,000 $0 $14 $9 $16 $27 $45 $75 ## 12 Vertical Transportation $10,000 $0 $9 $6 $11 $18 $30 $50 ## 13 Parking $30,000 $0 $28 $19 $32 $53 $89 $149 ## 14 Acoustical $10,000 $0 $9 $6 $11 $18 $30 $50 ## 15 Audio Visual $5,000 $0 $5 $3 $5 $9 $15 $25 ## 16 Telecommunications / Data $15,000 $0 $14 $9 $16 $27 $45 $75 ## 17 Security $15,000 $0 $14 $9 $16 $27 $45 $75 ## 18 Contingency $148,250 $0 $136 $93 $156 $263 $441 $737 ## Subtotal $3,113,250 $2,426 $2,001 $2,880 $4,748 $7,814 $12,827 $20,965 ## ## (2) Miscellaneous Development Cost ## 1 Site Security During Construction $200,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 ## 2 Utility Consumption $50,000 $46 $30 $49 $80 $132 $216 $352 ## 3 Drawing / Printing $10,000 $400 $400 $400 $400 $400 $400 $400 ## 4 Team Meeting / Catering $5,000 $200 $200 $200 $200 $200 $200 $200 ## Subtotal $265,000 $8,646 $8,630 $8,649 $8,680 $8,732 $8,816 $8,952 ## ## (3) Permits & Fees ## 1 Building Permit Fee $349,936 $349,936 $0 $0 $0 $0 $0 $0 ## 2 Plan Check Fee $87,484 $87,484 $0 $0 $0 $0 $0 $0 ## 3 Grading Permit $93,316 $93,316 $0 $0 $0 $0 $0 $0 ## 4 Water & Sewer Tap Fees $0 $0 $0 $0 $0 $0 $0 $0 ## 5 State Imposed Fees $0 $0 $0 $0 $0 $0 $0 $0 ## 6 School Impact Fees $466,582 $466,582 $0 $0 $0 $0 $0 $0 ## 7 Other Misc. Permits & Fees $233,291 $233,291 $0 $0 $0 $0 $0 $0 ## Subtotal $1,230,609 $1,230,609 $0 $0 $0 $0 $0 $0 ## ## (4) Testing & Inspections ## 1 Soils Testing $20,000 $10,000 $10,000 $0 $0 $0 $0 $0 ## 2 Concrete Testing / Reinforcing Inspec $15,000 $0 $14 $14 $28 $57 $115 $227 ## 3 Masonry Testing / Inspection $15,000 $0 $14 $14 $28 $57 $115 $227 ## 4 Steel Testing / Inspections $35,000 $0 $32 $33 $66 $134 $268 $530 ## 5 Fireproofing Testing / Inspections $25,000 $0 $0 $0 $0 $0 $0 $0 ## 6 Building Envelope / Window Wall Testing $20,000 $0 $0 $0 $0 $0 $0 $0 ## Subtotal $130,000 $10,000 $10,060 $61 $123 $248 $497 $984 ## ## (5) Legal & Accounting ## 1 Due Diligence / Purchase Agreement $50,000 $50,000 $0 $0 $0 $0 $0 $0 ## 2 Development / Construction Agreement $30,000 $30,000 $0 $0 $0 $0 $0 $0 ## 3 Consultant / Broker Agrmt / CC&Rs $30,000 $0 $0 $0 $0 $0 $0 $0 ## 4 Real Estate Tax Consultant / Audits / Accounting $20,000 $0 $833 $833 $833 $833 $833 $833 ## 5 Miscellaneous $5,000 $0 $208 $208 $208 $208 $208 $208 ## Subtotal $135,000 $80,000 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 ## ## (6) Insurance During Construction ## 1 Builders Risk Insurance (Hard Cost) $561,297 $0 $23,387 $23,387 $23,387 $23,387 $23,387 $23,387 ## 2 Builders Risk Insurance (Soft Cost) $36,552 $0 $1,523 $1,523 $1,523 $1,523 $1,523 $1,523 ## 3 General Liablility Wrap-up Policy $1,403,243 $0 $58,468 $58,468 $58,468 $58,468 $58,468 $58,468 ## 4 Earthquake Insurance $0 $0 $0 $0 $0 $0 $0 $0 ## 5 Professional Insurance - e.g.: CPPIC $50,000 $0 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 ## 6 Commercial Umbrella $0 $0 $0 $0 $0 $0 $0 $0 ## 7 Force Majeure $0 $0 $0 $0 $0 $0 $0 $0 ## Subtotal $2,051,091 $0 $85,462 $85,462 $85,462 $85,462 $85,462 $85,462 ## ## (7) Taxes During Construction ## 1 Property Taxes $577,728 $0 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 ## 2 Sales Tax $0 $0 $0 $0 $0 $0 $0 $0 ## Subtotal $577,728 $0 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 ## ## (8) Marketing / Leasing Office ## 1 Leasing Office (Staff/Equip/Furn/Trailer) $50,000 $0 $0 $0 $0 $0 $0 $0 ## 2 Model Room Construction $75,000 $0 $0 $0 $0 $0 $0 $0 ## 3 Model Room Furniture $25,000 $0 $0 $0 $0 $0 $0 $0 ## 4 Marketing (Print/Media Advt/PR) $50,000 $0 $0 $0 $0 $0 $0 $0 ## 5 Leasing Commissions (Retail/Commercial) $142,800 $0 $0 $0 $0 $0 $0 $0 ## 6 Other $5,000 $0 $208 $208 $208 $208 $208 $208 ## Subtotal $347,800 $0 $208 $208 $208 $208 $208 $208 ## ## (9) Developer, Contractor, PM Fees & Escalations ## 1 Developer / Contractor Fee $5,612,970 $5,148 $3,335 $5,489 $9,027 $14,820 $24,265 $39,551 2 Project Management Fee (Hard Cost, Net of Contingency) $1,700,900 $1,560 $1,011 $1,663 $2,736 $4,491 $7,353 $11,985 ## 3 Escalations $3,305,416 $3,032 $1,964 $3,233 $5,316 $8,728 $14,289 $23,291 ## Subtotal $10,619,286 $9,740 $6,309 $10,386 $17,079 $28,039 $45,907 $74,828 ## ## (10) Soft Cost Contingency ## 1 Soft Cost Contingency $923,488 $847 $549 $903 $1,485 $2,438 $3,992 $6,507 SOFT COST $19,393,252 $1,342,268 $138,332 $133,663 $142,900 $158,056 $182,824 $223,021 TOTAL COST, PRE-FINANCING $126,359,752 $14,767,068 $221,075 $2,585,604 $7,344,434 $4,612,260 $4,069,437 $1,212,453 Appendix: Page 22 SAMPLE
  33. 33. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL PRE-DEVELOPMENT COST (1) Land / Existing Property 1 Land Value / Value of Existing Property $12,000,000 2 Real Estate Fees (Broker, Acquisition, Finder) None $0 3 Title Policy Seller Pays $0 4 Transfer Taxes Seller Pays $0 5 Legal / Due Diligence $85,000 6 Off-Site Improvements $33,333 7 Miscellaneous Fees $16,667 Subtotal $12,135,000 (2) Eng Fees / Entitlement 1 Appraisal Fees $150,000 2 Demolition Cost $700,000 3 Market Study $100,000 4 Planning & Zoning Fee - PUD Approval $150,000 5 Lot Line Adjustment - Parcel Maps/Plats $100,000 6 Entitlement Consultant w/Planning & Zoning $0 7 Financial Consultant $25,000 8 Special Development Fees $0 9 Traffic Study $25,000 10 Geotechnical Survey $7,000 11 Environmental Survey - Phase I $7,500 12 Environmental Survey - Phase II $7,500 13 ALTA Survey $10,000 14 Flood Certificate / Inspection Fee $0 15 Hazardous Material Remediation $0 Subtotal $1,282,000 PRE-DEVELOPMENT COSTS $13,417,000 HARD COST (1) Building 1 Foundations $7,000,000 2 Substructure (Slab on Grade; Basement Excavation; Basement Walls) $13,000,000 3 Superstructure (Floor & Roof Construction; Stair Construction) $30,000,000 4 Exterior Closure (Walls; Doors/Windows) $7,000,000 5 Roofing $750,000 6 Interior Construction (Partitions; Interior Finishes; Doors/Windows) $3,000,000 7 Elevators $780,000 8 Mechanical (Plumbing; HVAC; Fire Protection; Other) $2,700,000 9 Electrical $1,700,000 10 Equipment (Fixed/Movable Equipment; Furnishings) $675,000 Subtotal $66,605,000 (2) Parking 1 At Grade Parking $4,080,000 2 Below Grade Parking $9,520,000 Subtotal $13,600,000 (3) Sitework Sitework $4,500,000 (4) TIA (Retail / Commercial) Tenant Improvement Allowance $340,000 Subtotal $340,000 (5) Contingency Hard Cost Contingency $8,504,500 HARD COST - CONSTRUCTION $93,549,500 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $57,842 $95,317 $154,786 $245,473 $375,035 $541,525 $107,421 $177,017 $287,459 $455,878 $696,493 $1,005,689 $247,894 $408,500 $663,367 $1,052,027 $1,607,291 $2,320,821 $57,842 $95,317 $154,786 $245,473 $375,035 $541,525 $6,197 $10,213 $16,584 $26,301 $40,182 $58,021 $24,789 $40,850 $66,337 $105,203 $160,729 $232,082 $6,445 $10,621 $17,248 $27,353 $41,790 $60,341 $22,310 $36,765 $59,703 $94,682 $144,656 $208,874 $14,047 $23,148 $37,591 $59,615 $91,080 $131,513 $5,578 $9,191 $14,926 $23,671 $36,164 $52,218 $550,366 $906,938 $1,472,785 $2,335,675 $3,568,454 $5,152,609 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $96,971 $155,085 $243,432 $371,109 $541,299 $740,732 $647,337 $1,062,024 $1,716,217 $2,706,784 $4,109,754 $5,893,341 Appendix: Page 23 SAMPLE
  34. 34. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL SOFT COST (1) Design & Consultants 1 Architect $1,500,000 2 MEP & Fire Protection $500,000 3 Structural $400,000 4 ADA $100,000 5 Surveyor $75,000 6 Civil $70,000 7 Exterior Skin $0 8 Landscaping $200,000 9 Restaurant & Kitchen $0 10 Roofing & Waterproofing $20,000 11 Swimming Pool & Equipment $15,000 12 Vertical Transportation $10,000 13 Parking $30,000 14 Acoustical $10,000 15 Audio Visual $5,000 16 Telecommunications / Data $15,000 17 Security $15,000 18 Contingency $148,250 Subtotal $3,113,250 (2) Miscellaneous Development Cost 1 Site Security During Construction $200,000 2 Utility Consumption $50,000 3 Drawing / Printing $10,000 4 Team Meeting / Catering $5,000 Subtotal $265,000 (3) Permits & Fees 1 Building Permit Fee $349,936 2 Plan Check Fee $87,484 3 Grading Permit $93,316 4 Water & Sewer Tap Fees $0 5 State Imposed Fees $0 6 School Impact Fees $466,582 7 Other Misc. Permits & Fees $233,291 Subtotal $1,230,609 (4) Testing & Inspections 1 Soils Testing $20,000 2 Concrete Testing / Reinforcing Inspec $15,000 3 Masonry Testing / Inspection $15,000 4 Steel Testing / Inspections $35,000 5 Fireproofing Testing / Inspections $25,000 6 Building Envelope / Window Wall Testing $20,000 Subtotal $130,000 (5) Legal & Accounting 1 Due Diligence / Purchase Agreement $50,000 2 Development / Construction Agreement $30,000 3 Consultant / Broker Agrmt / CC&Rs $30,000 4 Real Estate Tax Consultant / Audits / Accounting $20,000 5 Miscellaneous $5,000 Subtotal $135,000 (6) Insurance During Construction 1 Builders Risk Insurance (Hard Cost) $561,297 2 Builders Risk Insurance (Soft Cost) $36,552 3 General Liablility Wrap-up Policy $1,403,243 4 Earthquake Insurance $0 5 Professional Insurance - e.g.: CPPIC $50,000 6 Commercial Umbrella $0 7 Force Majeure $0 Subtotal $2,051,091 (7) Taxes During Construction 1 Property Taxes $577,728 2 Sales Tax $0 Subtotal $577,728 (8) Marketing / Leasing Office 1 Leasing Office (Staff/Equip/Furn/Trailer) $50,000 2 Model Room Construction $75,000 3 Model Room Furniture $25,000 4 Marketing (Print/Media Advt/PR) $50,000 5 Leasing Commissions (Retail/Commercial) $142,800 6 Other $5,000 Subtotal $347,800 (9) Developer, Contractor, PM Fees & Escalations 1 Developer / Contractor Fee $5,612,970 2 Project Management Fee (Hard Cost, Net of Contingency) $1,700,900 3 Escalations $3,305,416 Subtotal $10,619,286 (10) Soft Cost Contingency 1 Soft Cost Contingency $923,488 SOFT COST $19,393,252 TOTAL COST, PRE-FINANCING $126,359,752 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 $17,104 $27,354 $42,936 $65,455 $95,473 $130,648 $5,701 $9,118 $14,312 $21,818 $31,824 $43,549 $4,561 $7,294 $11,450 $17,455 $25,459 $34,840 $1,140 $1,824 $2,862 $4,364 $6,365 $8,710 $855 $1,368 $2,147 $3,273 $4,774 $6,532 $798 $1,276 $2,004 $3,055 $4,455 $6,097 $0 $0 $0 $0 $0 $0 $1,653 $2,723 $4,422 $7,014 $10,715 $15,472 $0 $0 $0 $0 $0 $0 $165 $272 $442 $701 $1,072 $1,547 $124 $204 $332 $526 $804 $1,160 $83 $136 $221 $351 $536 $774 $248 $409 $663 $1,052 $1,607 $2,321 $83 $136 $221 $351 $536 $774 $41 $68 $111 $175 $268 $387 $124 $204 $332 $526 $804 $1,160 $124 $204 $332 $526 $804 $1,160 $1,225 $2,019 $3,278 $5,199 $7,943 $11,469 $34,028 $54,609 $86,064 $131,840 $193,438 $266,601 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $570 $912 $1,431 $2,182 $3,182 $4,355 $400 $400 $400 $400 $400 $400 $200 $200 $200 $200 $200 $200 $9,170 $9,512 $10,031 $10,782 $11,782 $12,955 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $439 $814 $1,393 $2,088 $2,583 $2,532 $439 $814 $1,393 $2,088 $2,583 $2,532 $1,025 $1,899 $3,250 $4,872 $6,027 $5,908 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,904 $3,527 $6,035 $9,048 $11,193 $10,972 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $833 $833 $833 $833 $833 $833 $208 $208 $208 $208 $208 $208 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 $23,387 $23,387 $23,387 $23,387 $23,387 $23,387 $1,523 $1,523 $1,523 $1,523 $1,523 $1,523 $58,468 $58,468 $58,468 $58,468 $58,468 $58,468 $0 $0 $0 $0 $0 $0 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $85,462 $85,462 $85,462 $85,462 $85,462 $85,462 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $0 $0 $0 $0 $0 $0 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $64,001 $102,356 $160,665 $244,932 $357,258 $488,883 $19,394 $31,017 $48,686 $74,222 $108,260 $148,146 $37,689 $60,277 $94,614 $144,238 $210,385 $287,898 $121,085 $193,650 $303,965 $463,392 $675,903 $924,927 $10,530 $16,840 $26,434 $40,298 $58,779 $80,435 $287,502 $388,923 $543,314 $766,143 $1,061,879 $1,406,674 $934,839 $1,450,947 $2,259,530 $3,472,927 $5,171,633 $7,300,015 Appendix: Page 24 SAMPLE
  35. 35. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL PRE-DEVELOPMENT COST (1) Land / Existing Property 1 Land Value / Value of Existing Property $12,000,000 2 Real Estate Fees (Broker, Acquisition, Finder) None $0 3 Title Policy Seller Pays $0 4 Transfer Taxes Seller Pays $0 5 Legal / Due Diligence $85,000 6 Off-Site Improvements $33,333 7 Miscellaneous Fees $16,667 Subtotal $12,135,000 (2) Eng Fees / Entitlement 1 Appraisal Fees $150,000 2 Demolition Cost $700,000 3 Market Study $100,000 4 Planning & Zoning Fee - PUD Approval $150,000 5 Lot Line Adjustment - Parcel Maps/Plats $100,000 6 Entitlement Consultant w/Planning & Zoning $0 7 Financial Consultant $25,000 8 Special Development Fees $0 9 Traffic Study $25,000 10 Geotechnical Survey $7,000 11 Environmental Survey - Phase I $7,500 12 Environmental Survey - Phase II $7,500 13 ALTA Survey $10,000 14 Flood Certificate / Inspection Fee $0 15 Hazardous Material Remediation $0 Subtotal $1,282,000 PRE-DEVELOPMENT COSTS $13,417,000 HARD COST (1) Building 1 Foundations $7,000,000 2 Substructure (Slab on Grade; Basement Excavation; Basement Walls) $13,000,000 3 Superstructure (Floor & Roof Construction; Stair Construction) $30,000,000 4 Exterior Closure (Walls; Doors/Windows) $7,000,000 5 Roofing $750,000 6 Interior Construction (Partitions; Interior Finishes; Doors/Windows) $3,000,000 7 Elevators $780,000 8 Mechanical (Plumbing; HVAC; Fire Protection; Other) $2,700,000 9 Electrical $1,700,000 10 Equipment (Fixed/Movable Equipment; Furnishings) $675,000 Subtotal $66,605,000 (2) Parking 1 At Grade Parking $4,080,000 2 Below Grade Parking $9,520,000 Subtotal $13,600,000 (3) Sitework Sitework $4,500,000 (4) TIA (Retail / Commercial) Tenant Improvement Allowance $340,000 Subtotal $340,000 (5) Contingency Hard Cost Contingency $8,504,500 HARD COST - CONSTRUCTION $93,549,500 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $721,419 $864,482 $913,593 $845,814 $692,364 $511,864 $1,339,778 $1,605,467 $1,696,673 $1,570,797 $1,285,818 $950,604 $3,091,795 $3,704,923 $3,915,400 $3,624,917 $2,967,272 $2,193,701 $721,419 $864,482 $913,593 $845,814 $692,364 $511,864 $77,295 $92,623 $97,885 $90,623 $74,182 $54,843 $309,180 $370,492 $391,540 $362,492 $296,727 $219,370 $80,387 $96,328 $101,800 $94,248 $77,149 $57,036 $278,262 $333,443 $352,386 $326,243 $267,055 $197,433 $175,202 $209,946 $221,873 $205,412 $168,145 $124,310 $69,565 $83,361 $88,097 $81,561 $66,764 $49,358 $6,864,301 $8,225,546 $8,692,841 $8,047,920 $6,587,839 $4,870,382 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $929,805 $1,048,473 $1,048,473 $929,805 $740,732 $541,299 $7,794,107 $9,274,019 $9,741,313 $8,977,725 $7,328,571 $5,411,682 Appendix: Page 25 SAMPLE
  36. 36. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL SOFT COST (1) Design & Consultants 1 Architect $1,500,000 2 MEP & Fire Protection $500,000 3 Structural $400,000 4 ADA $100,000 5 Surveyor $75,000 6 Civil $70,000 7 Exterior Skin $0 8 Landscaping $200,000 9 Restaurant & Kitchen $0 10 Roofing & Waterproofing $20,000 11 Swimming Pool & Equipment $15,000 12 Vertical Transportation $10,000 13 Parking $30,000 14 Acoustical $10,000 15 Audio Visual $5,000 16 Telecommunications / Data $15,000 17 Security $15,000 18 Contingency $148,250 Subtotal $3,113,250 (2) Miscellaneous Development Cost 1 Site Security During Construction $200,000 2 Utility Consumption $50,000 3 Drawing / Printing $10,000 4 Team Meeting / Catering $5,000 Subtotal $265,000 (3) Permits & Fees 1 Building Permit Fee $349,936 2 Plan Check Fee $87,484 3 Grading Permit $93,316 4 Water & Sewer Tap Fees $0 5 State Imposed Fees $0 6 School Impact Fees $466,582 7 Other Misc. Permits & Fees $233,291 Subtotal $1,230,609 (4) Testing & Inspections 1 Soils Testing $20,000 2 Concrete Testing / Reinforcing Inspec $15,000 3 Masonry Testing / Inspection $15,000 4 Steel Testing / Inspections $35,000 5 Fireproofing Testing / Inspections $25,000 6 Building Envelope / Window Wall Testing $20,000 Subtotal $130,000 (5) Legal & Accounting 1 Due Diligence / Purchase Agreement $50,000 2 Development / Construction Agreement $30,000 3 Consultant / Broker Agrmt / CC&Rs $30,000 4 Real Estate Tax Consultant / Audits / Accounting $20,000 5 Miscellaneous $5,000 Subtotal $135,000 (6) Insurance During Construction 1 Builders Risk Insurance (Hard Cost) $561,297 2 Builders Risk Insurance (Soft Cost) $36,552 3 General Liablility Wrap-up Policy $1,403,243 4 Earthquake Insurance $0 5 Professional Insurance - e.g.: CPPIC $50,000 6 Commercial Umbrella $0 7 Force Majeure $0 Subtotal $2,051,091 (7) Taxes During Construction 1 Property Taxes $577,728 2 Sales Tax $0 Subtotal $577,728 (8) Marketing / Leasing Office 1 Leasing Office (Staff/Equip/Furn/Trailer) $50,000 2 Model Room Construction $75,000 3 Model Room Furniture $25,000 4 Marketing (Print/Media Advt/PR) $50,000 5 Leasing Commissions (Retail/Commercial) $142,800 6 Other $5,000 Subtotal $347,800 (9) Developer, Contractor, PM Fees & Escalations 1 Developer / Contractor Fee $5,612,970 2 Project Management Fee (Hard Cost, Net of Contingency) $1,700,900 3 Escalations $3,305,416 Subtotal $10,619,286 (10) Soft Cost Contingency 1 Soft Cost Contingency $923,488 SOFT COST $19,393,252 TOTAL COST, PRE-FINANCING $126,359,752 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 $163,996 $184,927 $184,927 $163,996 $130,648 $95,473 $54,665 $61,642 $61,642 $54,665 $43,549 $31,824 $43,732 $49,314 $49,314 $43,732 $34,840 $25,459 $10,933 $12,328 $12,328 $10,933 $8,710 $6,365 $8,200 $9,246 $9,246 $8,200 $6,532 $4,774 $7,653 $8,630 $8,630 $7,653 $6,097 $4,455 $0 $0 $0 $0 $0 $0 $20,612 $24,699 $26,103 $24,166 $19,782 $14,625 $0 $0 $0 $0 $0 $0 $2,061 $2,470 $2,610 $2,417 $1,978 $1,462 $1,546 $1,852 $1,958 $1,812 $1,484 $1,097 $1,031 $1,235 $1,305 $1,208 $989 $731 $3,092 $3,705 $3,915 $3,625 $2,967 $2,194 $1,031 $1,235 $1,305 $1,208 $989 $731 $515 $617 $653 $604 $495 $366 $1,546 $1,852 $1,958 $1,812 $1,484 $1,097 $1,546 $1,852 $1,958 $1,812 $1,484 $1,097 $15,279 $18,308 $19,349 $17,913 $14,663 $10,841 $337,438 $383,915 $387,200 $345,759 $276,691 $202,591 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $5,467 $6,164 $6,164 $5,467 $4,355 $3,182 $400 $400 $400 $400 $400 $400 $200 $200 $200 $200 $200 $200 $14,067 $14,764 $14,764 $14,067 $12,955 $11,782 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,975 $1,283 $738 $395 $203 $102 $1,975 $1,283 $738 $395 $203 $102 $4,608 $2,994 $1,721 $921 $474 $239 $23 $45 $134 $390 $1,091 $2,741 $18 $36 $107 $312 $873 $2,193 $8,599 $5,642 $3,437 $2,411 $2,843 $5,377 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $15,000 $833 $833 $833 $833 $833 $833 $208 $208 $208 $208 $208 $208 $1,042 $1,042 $1,042 $1,042 $1,042 $16,042 $23,387 $23,387 $23,387 $23,387 $23,387 $23,387 $1,523 $1,523 $1,523 $1,523 $1,523 $1,523 $58,468 $58,468 $58,468 $58,468 $58,468 $58,468 $0 $0 $0 $0 $0 $0 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $85,462 $85,462 $85,462 $85,462 $85,462 $85,462 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $0 $0 $0 $0 $0 $0 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $11,900 $11,900 $11,900 $11,900 $11,900 $11,900 $208 $208 $208 $208 $208 $208 $28,775 $28,775 $28,775 $28,775 $28,775 $28,775 $613,672 $691,992 $691,992 $613,672 $488,883 $357,258 $185,961 $209,695 $209,695 $185,961 $148,146 $108,260 $361,384 $407,506 $407,506 $361,384 $287,898 $210,385 $1,161,017 $1,309,193 $1,309,193 $1,161,017 $924,927 $675,903 $100,966 $113,852 $113,852 $100,966 $80,435 $58,779 $1,761,437 $1,966,716 $1,967,797 $1,763,571 $1,437,201 $1,108,782 $9,555,544 $11,240,735 $11,709,111 $10,741,296 $8,765,772 $6,520,464 Appendix: Page 26 SAMPLE
  37. 37. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL PRE-DEVELOPMENT COST (1) Land / Existing Property 1 Land Value / Value of Existing Property $12,000,000 2 Real Estate Fees (Broker, Acquisition, Finder) None $0 3 Title Policy Seller Pays $0 4 Transfer Taxes Seller Pays $0 5 Legal / Due Diligence $85,000 6 Off-Site Improvements $33,333 7 Miscellaneous Fees $16,667 Subtotal $12,135,000 (2) Eng Fees / Entitlement 1 Appraisal Fees $150,000 2 Demolition Cost $700,000 3 Market Study $100,000 4 Planning & Zoning Fee - PUD Approval $150,000 5 Lot Line Adjustment - Parcel Maps/Plats $100,000 6 Entitlement Consultant w/Planning & Zoning $0 7 Financial Consultant $25,000 8 Special Development Fees $0 9 Traffic Study $25,000 10 Geotechnical Survey $7,000 11 Environmental Survey - Phase I $7,500 12 Environmental Survey - Phase II $7,500 13 ALTA Survey $10,000 14 Flood Certificate / Inspection Fee $0 15 Hazardous Material Remediation $0 Subtotal $1,282,000 PRE-DEVELOPMENT COSTS $13,417,000 HARD COST (1) Building 1 Foundations $7,000,000 2 Substructure (Slab on Grade; Basement Excavation; Basement Walls) $13,000,000 3 Superstructure (Floor & Roof Construction; Stair Construction) $30,000,000 4 Exterior Closure (Walls; Doors/Windows) $7,000,000 5 Roofing $750,000 6 Interior Construction (Partitions; Interior Finishes; Doors/Windows) $3,000,000 7 Elevators $780,000 8 Mechanical (Plumbing; HVAC; Fire Protection; Other) $2,700,000 9 Electrical $1,700,000 10 Equipment (Fixed/Movable Equipment; Furnishings) $675,000 Subtotal $66,605,000 (2) Parking 1 At Grade Parking $4,080,000 2 Below Grade Parking $9,520,000 Subtotal $13,600,000 (3) Sitework Sitework $4,500,000 (4) TIA (Retail / Commercial) Tenant Improvement Allowance $340,000 Subtotal $340,000 (5) Contingency Hard Cost Contingency $8,504,500 HARD COST - CONSTRUCTION $93,549,500 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $350,624 $227,804 $142,963 $87,776 $53,169 $31,944 $651,158 $423,065 $265,503 $163,012 $98,743 $59,324 $1,502,673 $976,304 $612,699 $376,182 $227,868 $136,902 $350,624 $227,804 $142,963 $87,776 $53,169 $31,944 $37,567 $24,408 $15,317 $9,405 $5,697 $3,423 $150,267 $97,630 $61,270 $37,618 $22,787 $13,690 $39,069 $25,384 $15,930 $9,781 $5,925 $3,559 $135,241 $87,867 $55,143 $33,856 $20,508 $12,321 $85,151 $55,324 $34,720 $21,317 $12,913 $7,758 $33,810 $21,967 $13,786 $8,464 $5,127 $3,080 $3,336,184 $2,167,558 $1,360,293 $835,186 $505,906 $303,944 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $312 $3,095 $30,737 $154,059 $130,422 $21,375 $312 $3,095 $30,737 $154,059 $130,422 $21,375 $371,109 $243,432 $155,085 $96,971 $59,926 $36,765 $3,707,605 $2,414,084 $1,546,116 $1,086,217 $696,254 $362,084 Appendix: Page 27 SAMPLE
  38. 38. CLIENT NAME Property Name / Address MONTHLY BUDGET MONTHLY CASH FLOW - DEVELOPMENT BUDGET Total TOTAL SOFT COST (1) Design & Consultants 1 Architect $1,500,000 2 MEP & Fire Protection $500,000 3 Structural $400,000 4 ADA $100,000 5 Surveyor $75,000 6 Civil $70,000 7 Exterior Skin $0 8 Landscaping $200,000 9 Restaurant & Kitchen $0 10 Roofing & Waterproofing $20,000 11 Swimming Pool & Equipment $15,000 12 Vertical Transportation $10,000 13 Parking $30,000 14 Acoustical $10,000 15 Audio Visual $5,000 16 Telecommunications / Data $15,000 17 Security $15,000 18 Contingency $148,250 Subtotal $3,113,250 (2) Miscellaneous Development Cost 1 Site Security During Construction $200,000 2 Utility Consumption $50,000 3 Drawing / Printing $10,000 4 Team Meeting / Catering $5,000 Subtotal $265,000 (3) Permits & Fees 1 Building Permit Fee $349,936 2 Plan Check Fee $87,484 3 Grading Permit $93,316 4 Water & Sewer Tap Fees $0 5 State Imposed Fees $0 6 School Impact Fees $466,582 7 Other Misc. Permits & Fees $233,291 Subtotal $1,230,609 (4) Testing & Inspections 1 Soils Testing $20,000 2 Concrete Testing / Reinforcing Inspec $15,000 3 Masonry Testing / Inspection $15,000 4 Steel Testing / Inspections $35,000 5 Fireproofing Testing / Inspections $25,000 6 Building Envelope / Window Wall Testing $20,000 Subtotal $130,000 (5) Legal & Accounting 1 Due Diligence / Purchase Agreement $50,000 2 Development / Construction Agreement $30,000 3 Consultant / Broker Agrmt / CC&Rs $30,000 4 Real Estate Tax Consultant / Audits / Accounting $20,000 5 Miscellaneous $5,000 Subtotal $135,000 (6) Insurance During Construction 1 Builders Risk Insurance (Hard Cost) $561,297 2 Builders Risk Insurance (Soft Cost) $36,552 3 General Liablility Wrap-up Policy $1,403,243 4 Earthquake Insurance $0 5 Professional Insurance - e.g.: CPPIC $50,000 6 Commercial Umbrella $0 7 Force Majeure $0 Subtotal $2,051,091 (7) Taxes During Construction 1 Property Taxes $577,728 2 Sales Tax $0 Subtotal $577,728 (8) Marketing / Leasing Office 1 Leasing Office (Staff/Equip/Furn/Trailer) $50,000 2 Model Room Construction $75,000 3 Model Room Furniture $25,000 4 Marketing (Print/Media Advt/PR) $50,000 5 Leasing Commissions (Retail/Commercial) $142,800 6 Other $5,000 Subtotal $347,800 (9) Developer, Contractor, PM Fees & Escalations 1 Developer / Contractor Fee $5,612,970 2 Project Management Fee (Hard Cost, Net of Contingency) $1,700,900 3 Escalations $3,305,416 Subtotal $10,619,286 (10) Soft Cost Contingency 1 Soft Cost Contingency $923,488 SOFT COST $19,393,252 TOTAL COST, PRE-FINANCING $126,359,752 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 $65,455 $42,936 $27,354 $17,104 $10,570 $6,485 $21,818 $14,312 $9,118 $5,701 $3,523 $2,162 $17,455 $11,450 $7,294 $4,561 $2,819 $1,729 $4,364 $2,862 $1,824 $1,140 $705 $432 $3,273 $2,147 $1,368 $855 $528 $324 $3,055 $2,004 $1,276 $798 $493 $303 $0 $0 $0 $0 $0 $0 $10,018 $6,509 $4,085 $2,508 $1,519 $913 $0 $0 $0 $0 $0 $0 $1,002 $651 $408 $251 $152 $91 $751 $488 $306 $188 $114 $68 $501 $325 $204 $125 $76 $46 $1,503 $976 $613 $376 $228 $137 $501 $325 $204 $125 $76 $46 $250 $163 $102 $63 $38 $23 $751 $488 $306 $188 $114 $68 $751 $488 $306 $188 $114 $68 $7,426 $4,825 $3,028 $1,859 $1,126 $677 $138,874 $90,949 $57,797 $36,031 $22,194 $13,571 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $2,182 $1,431 $912 $570 $352 $216 $400 $400 $400 $400 $400 $400 $200 $200 $200 $200 $200 $200 $10,782 $10,031 $9,512 $9,170 $8,952 $8,816 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $5,349 $6,686 $4,911 $2,381 $923 $326 $4,279 $5,349 $3,929 $1,904 $739 $261 $9,629 $12,035 $8,840 $4,285 $1,662 $588 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $15,000 $0 $0 $0 $0 $0 $833 $833 $833 $833 $833 $833 $208 $208 $208 $208 $208 $208 $16,042 $1,042 $1,042 $1,042 $1,042 $1,042 $23,387 $23,387 $23,387 $23,387 $23,387 $23,387 $1,523 $1,523 $1,523 $1,523 $1,523 $1,523 $58,468 $58,468 $58,468 $58,468 $58,468 $58,468 $0 $0 $0 $0 $0 $0 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $85,462 $85,462 $85,462 $85,462 $85,462 $85,462 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $0 $0 $0 $0 $0 $0 $24,072 $24,072 $24,072 $24,072 $24,072 $24,072 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $11,900 $11,900 $11,900 $11,900 $11,900 $11,900 $208 $208 $208 $208 $208 $208 $28,775 $28,775 $28,775 $28,775 $28,775 $28,775 $244,932 $160,665 $102,356 $64,001 $39,551 $24,265 $74,222 $48,686 $31,017 $19,394 $11,985 $7,353 $144,238 $94,614 $60,277 $37,689 $23,291 $14,289 $463,392 $303,965 $193,650 $121,085 $74,828 $45,907 $40,298 $26,434 $16,840 $10,530 $6,507 $3,992 $817,324 $582,764 $425,990 $320,451 $253,495 $212,226 $4,524,929 $2,996,849 $1,972,106 $1,406,668 $949,749 $574,309 Appendix: Page 28 SAMPLE
  39. 39.                     Ploutus Advisors, LLC 1875 Century Park East, Suite 700 Century City CA 90067 Tel: 424.274.3561 Fax: 424.288.5624 Email: info@ploutusadvisors.com SAMPLE

×