Commercial Real Estate Development Model and Valuation Analysis
Originally published: 02/03/2022 09:40
Last version published: 23/06/2023 09:23
Publication number: ELQ-83508-3
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Commercial Real Estate Development Model and Valuation Analysis

20-Year Three Statement Analysis of Commercial Real Estate Development Plus a Business Plan Template

Description
This Commercial Real Estate Development Model is for both types of Development. Develop to hold and lease, or develop to sell. The develop to hold and lease automatically produces a 20-year three statement analysis with all funding amortization as well as re-evaluations according to your input data. the models will also calculate income tax and there is also the option for vacancy factors. This lease Model is extensive in that it will calculate the correct Financial analysis according to your tax periods and cash flows. It is very simple to use this Financial Model in that only basic data inputs will drive the model to an expansive analysis which may be used to obtain funding or investors. The Model is versatile enough to use for a Commercial Office Park or single-tenant type Model. The Model allows you to easily change data inputs and test the sensitivity of the opportunity. There is a separate Model for the Valuation of a Development project which is for Sale. In other words, if you are developing to Sell off separate units or the building as a whole, then you will not require the Financial Statements, but rather the evaluation of how profitable the project will be. This Model then only requires you to enter expected Cash Flows (expenses and expected sales income) with corresponding dates. The timing of cash flows is extremely important to measure TVM. For the "develop to sell" model we make use of automated formulas such as XNPV and XIRR which are able to perform what the NPV and IRR are capable of however with irregular cash flows at differing dates. Thirdly, there is a quick to use valuation table for comparing multiple Projects which is available for development to sell. This method of measuring the profitability of each project opportunity quickly will simply demand cash flow inputs and dates. you are then able to compare the various opportunities quickly and easily. The quick comparison model also makes use of XIRR and XNPV.

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Excel Template

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Further information

This Model is for evaluating commercial real estate developments. Whether it is a development for sale or development to hold and lease. There is a 20-year three statement analysis for the lease option.

This model applies to all types of commercial real estate development. Whether it is an office park or single-tenant type development.


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