My question is on the Residual Land Value Analysis Module — how is it calculated? I look at the formulas but they didn’t tell me anything–it referred to the development tab but the dev tab is basically blank. It has one cell. So I ended up turning off the residual land value analysis so I could enter the actual price paid for the land. However, if I were to use the residual land value analysis what does it tell me and how is it calculated? Does it indicate what the value of the land should be after we build on it?
In terms of how the residual land value is calculated. It uses a macro to solve for a given return metric. So for instance, if you set the target return metric to ‘Levered IRR’ (column F) and then set your target Levered IRR to 15% (column G) , when you hit the ‘Find Residual Land Value’ button a macro will run that will iterate through different Total Land Costs until the Levered IRR at that Total Land Cost is equal to 15%.
