Student Housing New Development Modeling Questions

[Anonymous]

7 years, 5 months ago #2674

Hi,
Thank you for taking the time to put this model together. After spending some time going through and modeling a few different deals I have several questions.

1. Construction loan payoff / stabilization date / perm. debt:
The schedule I normally follow for a student housing development is typically:

Development: Month 1 through Month 19
Operations Begin / Stabilization: Month 20
Construction Load Payoff / Perm. Debt takes over: Month 32

I would like to carry the construction loan through when perm. debt takes over after 1 year of operations however if I adjust the model to have the stabilization occur in month 32 there are some undesirable outcomes. The easiest fix for this would be to add the ability for a second “refi” to match the terms of the construction loan for that 12 month period (Month 20-32), at which point it is taken out by the Perm. Debt. Is this something that can be added or is there another way around this that I am not seeing?

2. Construction loan fee payments:
Can the construction loan payment be set as a one time expense (first month of loan draw) rather than amortized over the loan draw period?

3. NRA on Student Housing:
NRA on Summary tab is inaccurate when modeling Student Housing due to the unit to bed conversion. Can this be updated to reflect the actual NRA?

4. Multiple land purchases:
Is it possible to add multiple land purchases? If a second item is added to ‘Land’ on the Budget tab the model throws an error.

5. Development budget categories:
How are additional categories (not items) added to the development budget? Can these be reflected on the S&U tab too?

Thanks

[Spencer Burton]

7 years, 5 months ago #3198

A lot of great questions, let me take them one at a time:

1. You’re correct, the Permanent Loan funds per the stabilization date assumption entered on Summary tab. There is no way to (easily) change this logic. However, keep in mind that your assumed “stabilization date” does not have to match your actual stabilization date. You’ll notice the stabilization date input on the Summary tab is an orange font (optional input) cell. This is for situations just as you propose where you wish to set the Permanent Loan fund date to some period that doesn’t match the actual stabilization. So – if I understand what you’re needing – just change the stabilization date assumption on the Summary tab and it should give you your desired result.

On a related note. If you change the stabilization date assumption to a date that does not match the actual stabilization, be sure to confirm that the first stabilized year assumption (cell J7 on the ORI-OpSt or MF-OpSt tabs) – also an orange font/optional input cell – is correct or your stabilized value output will be off.

2. Sure. Just set the Construction Loan Fees input (S&U tab) to 0%, and add a ‘Construction Loan Fee’ line item to your budget with a start date of 1 and a length of 1.

3. I’ll add it to my list of bug fixes.

4. Hmm.. Not sure I fully understand. The model gives you an error when you attempt to add a line item under Land? I can’t seem to replicate that on my end. Could you send me a screenshot?

5. Not by default. This would require customizing the model.