Major Mixed-Use Development Financial Modeling: How Difficult Could It Possibly Be?

by Bruce Kirsch on May 10, 2012

Well, pretty difficult. There’s lots of moving parts. You’re basically marrying several independent financial models into one mega-model. The permutations and combinations that make it particularly busy are:

  • Optionality on developing or selling each individual parcel
  • Optionality on, if selling the parcel, buying back the retail component
  • Optionality on retaining ownership of part, or all of, the public parking component
  • Disparate equity investors with different promote structures across the horizontal and vertical development components
  • Optionality on Master Developer as Land Equity contributor to vertical developments
  • And more.

While complicated, it’s all doable, and it all starts with a basic framework as shown below. From there it becomes tens of millions of spreadsheet cells which all feed into a Master Cash Flow summary.

How to organize the financial modeling of a major mixed-use real estate development project.

Let us know if REFM Consulting can help you model your major mixed-use project! We like doing these for clients because it’s essentially a giant puzzle. (and we like puzzles)

Previous post:

Next post: