Construction Financing – ORI

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  • Anonymous
    Inactive
    3 years, 10 months ago #3525

    I am using the model to underwrite a building purchase. The building is vacant but will be leased up in the first year. Significant TI’s will be spent and there will be a permanent loan put in place from Day 1. There is an operational cash shortfall due to the building being vacant for the first few months until TI’s are complete. In the model it is using the Dev-Interect Calc to make up for this in year 1 (showing in the Property CF tab under Construction Financing line (row 83). I can’t seem to trace how this is getting paid back, if there is interest on it and also if this would not be debt and instead would just want to have equity partners contribute more capital at the outset can the model do that?

    Thanks in advance for any help/advice.

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