[Spencer Burton]

7 years, 6 months ago in reply to: Return on Cost #3170

Upon stabilization, see Cell S24 of the Summary tab – the model calls it ‘Yield on Cost’ or YOC. The annual Free and Clear return (i.e. Return on Cost) for each year is shown on the ‘Property CF’ tab, row 24.

[Spencer Burton]

7 years, 6 months ago in reply to: Construction Loan Payoff Date #3172

At stabilization as set on the Summary tab.

[Spencer Burton]

7 years, 6 months ago in reply to: Lease-up #3174

Enter units pre-leased as of operation start for each unit type in column I of the MF-RR tab. Then, enter the number of total units/month that will lease thereafter in cell L11 of the MF-RR tab. If you’re interested to see the occupancy in each month, you can find that in row 56 of the MF-OpSt tab.

[Spencer Burton]

7 years, 6 months ago in reply to: Where is vacancy entered? #3176

Cell H24 of the MF-OpSt tab

[Spencer Burton]

7 years, 6 months ago in reply to: IRR Matrix "N/A" for IRR #3178

In years when the property is not stabilized and it’s therefore not possible to calculate a residual value, the IRR Matrix outputs an “N/A” value for IRR.

[Spencer Burton]

7 years, 6 months ago in reply to: Perm. Debt start date #3180

The Permanent Loan funds at stabilization. When the Development Module is turned off, stabilization is in time 0 and the Permanent Loan funds immediately. When the Development Module is turned on, the Permanent Loan funds on the stabilization date/month as entered on the Summary tab, cell M17.

[Spencer Burton]

7 years, 6 months ago in reply to: Perm. Loan Term #3182

The Permanent Loan term is automatically calculated as the difference between your hold period, in months, and your construction loan term. So if your hold period is 120 months, and your construction loan term is 31 months, then your Permanent loan term is 89 months.

[Spencer Burton]

7 years, 6 months ago in reply to: Different Equity Amount Between Sources and Uses and Equity CF tabs #3184

The difference has to do with the period that that particular module is calculating. The Sources and Uses tab relates only to the cash flows modeled in the Development Module while the Equity CF tab relates to Development+Operations+Residual cash flows.

The difference between the two values is the amount of any operating shortfall during operations. This is most common when there is an operating shortfall during lease-up requiring the partnership to bring additional equity to the table post-construction.

One workaround to cover the equity requirement during lease-up is to inclue an operating shortfall line item in the development budget. By doing this, you essential borrow from the lender to cover the operating shortfall.

As a general rule of thumb, the Equity amount on the Sources and Uses tab would be the amount of ‘Hard Equity’ the partnership would forecast to need.

[Spencer Burton]

7 years, 6 months ago in reply to: Construction Interest Calculation #3186

The construction interest is modeled on the Dev-Interest Calc tab (show that tab by setting F43 on the Summary tab to ‘Show’). Interest is calculated as the Construction Interest Rate (Sources and Uses C15) divided by 12 (to arrive at a monthly interest rate) times the construction loan balance in each month (row 21) plus any accrued interest. This calculation is a circular reference, hence the ‘Set Construction Loan Amount’ macro on the Sources and Uses tab which iterates the calculation to arrive at an interest reserve and total construction loan amount.

[Spencer Burton]

7 years, 7 months ago in reply to: Construction Debt #3166

The model does not currently support any other sequence than ‘Equity 1st, Debt 2nd’. I’ve included an input to change that assumption down the road, but currently no other sequence is available.

[Spencer Burton]

7 years, 7 months ago in reply to: Value-Add Office Investment #3162

Sorry for the delayed response – it’s been a very busy week for me!

The renewal probability determines how much in tenant improvements, leasing commissions, free rent, and downtime is charged to the deal. TIs, leasing commission, and free rent are paid at new lease start date based on the ratio of new/renew at the renewal probability percentage. Downtime is charged based on the probability the tenant vacates over the entire downtime period.

You can dig into the renewal probability calcs, and all other backend calcs by showing the Calc tabs. This can been down on the Summary tab.

[Spencer Burton]

7 years, 7 months ago in reply to: Value-Add Office Investment #3160

There isn’t currently a way to change the funding method for construction debt. It funds once all required equity dollars have been invested, and is paid off at stabilization via the permanent debt.

[Spencer Burton]

7 years, 7 months ago in reply to: Value-Add Office Investment #3158

The model does not currently support any other sequence but Equity 1st, Debt 2nd. I’ve included an input to change that assumption down the road, but currently no other sequence is available.

[Spencer Burton]

7 years, 7 months ago in reply to: Hidden Cells #3164

I use conditional formatting extensively in the Ai1 to hide or grey out cells that are not relevant to a given situation. In the case of cell M23 on the Summary tab (Discount Rate), the Development Module does not calculate a DCF value and therefore the Discount Rate is unnecessary. Thus, that cell is hidden when the Development Module is active.

With all of that said, if you do find a cell hidden or greyed out that you’d expect to be visible but it’s not, there may be an error. Let me know and I can troubleshoot the issue.

[Spencer Burton]

7 years, 7 months ago in reply to: Value-Add Office Investment #3150

Here you go:
https://www.adventuresincre.com/tenth-walkthrough-office-value-add/
Let me know if you have other questions.