Hotel Development Model (Updated November 2022)
Excited to share the new A.CRE Hotel Development Model with everyone. As evidenced by the numerous requests we have gotten for this over the years, this model is long overdue so I’m quite happy to get it out there finally.
At the core, the hotel development model is basically a hybrid of our Hotel Acquisition Model – The Basic Model and our Condominium Development Model with a lot of customization work added. Between the both of those models, there was mostly everything we needed, so if you have used or are familiar with either of those models, the components and the mechanics of this model should be somewhat familiar to you.
What’s Included in the Hotel Development Model
The model contains seven worksheets as follows:
- Summary – contains General Info, Timing, Exit Assumptions, Project Level and Partnership Returns, Sources and Uses, Property Metrics, Construction Financing and Refinancing Assumptions, Sensitivity Analysis, Visual of Capital Outflow During Development
- Operating Cash Flow – contains annual operating projections and input assumptions for revenue and expense line items. Also, allow for year 1 stabilization projections for occupancy on a monthly basis.
- Budget – build or input your budget assumptions here.
- Monthly Cash Flows – here is where you project out your development cash flows, review the draw schedule and input your interest rate projections, adjust the seasonality of your NOI, and review your monthly levered and unlevered cash flows.
- Annual Cash Flows – A simplified roll up of the monthly cash flows
- Custom Cash Flows – if you select Custom projections for any budget line item in the Monthly Cash Flow tab, you will come to this tab and manually input your custom cash flow.
- Waterfall – model out partnership splits between a GP and LP over four tiers using IRR hurdles.
Video Tutorial – Using the Hotel Development Model
Video Tutorial #2 – New Mezz Debt Component Review
Video Tutorial #3 – Updates for v1.3 – Sensitivity Analysis and Visual of Capital Outflow During Development among Other Updates
Download the A.CRE Hotel Development Model
To make this model accessible to everyone, it is offered on a “Pay What You’re Able” basis with no minimum (enter $0 if you’d like) or maximum (your support helps keep the content coming – similar real estate development models sell for $100 – $300+ per license). Just enter a price together with an email address to send the download link to, and then click ‘Continue’. If you have any questions about our “Pay What You’re Able” program or why we offer our models on this basis, please reach out to either Mike or Spencer.
We regularly update the model (see version notes). Paid contributors to the model receive a new download link via email each time the model is updated.
Version 1.0 – 2019.10.28
- Initial launch
Version 1.2 – 2019,12,20
- Added Mezz Debt Component
- Minor formatting and fixes
Version 1.3 – 2020.2.03
- Added sensitivity analysis
- Added visual on summary tab of capital outflow during development
- Added ability to pay down construction loan interest with operating cash flows
- Added debt metrics to the Summary tab
- Fixed error in permanent debt calcs
- Minor formatting and bug fixes
Version 1.4 – 2020.7.10
- Error fix in tier 1 waterfall calculation
- Formatting update son Summary tab
- Error fix in OpCashFlow tab calculation – Dept Exp – Other Operated Depts
- Formatting Updates on OpCashFlow Tab
- Error fix in permanent debt payment calc on MonthlyCF tab
- Error fix in summation of budget line items in Budget Tab
- Added conditional formatting on the Summary tab to warn the user if they have put a date that is too early for refinancing prior to constrution completion. If the refinace happens prior to construction completion, the constrution financing will still be underway without any takeout for the remaining balance.
- Formatting in MonthlyCF tab to show negative operating cash flows as negative amounts.
- Updated error check formula on AnnualCF tab to account for rounding errors
- Fixed formulas in AnnualCF tab in Sources section to include interest reserve and fees for mezz and senior debt
- Minor format update on Summary tab