Mixed-Use Real Estate Model: Leverage / JV Options

A general real estate model to plan all assumptions for up to 7 ‘uses’ for a given property. Includes development / acquisition, leverage if desired, operations, and dissolution for up to 10 years. Includes monthly and annual output summaries.

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Video Tutorial:

Mixed-use real estate means a property that is used for multiple things. For example, it is not just for apartments or food places or offices. Instead, the property is used for multiple things all at once. For example, you could have parking garages, offices, food places, and residential units all accounted for. This model will allow for up to 7 separate uses to be configured. Each will have its own assumptions that drive down to an individual net operating income (NOI) per use. This data all rolls into a consolidated view on the same 10-year timeline.

Each Individual ‘Use’ can configure the following:
– Acquisition / development costs in monthly periods (up to 22 slots for each use across the 10-year timeline)
– Start month of rent, square footage, monthly rent, rent growth, occupancy, and occupancy improvement
– 17 monthly operating expense inputs and their annual growth.
– Exit month, exit cap rate, and selling fees

The user can switch leverage on or off with a ‘yes/no’ selector as well as the month all debt is to be repaid. The resulting cash flow will update accordingly. The debt is configured through three potential facilities used in order. The first is a construction loan that is interest only. This can be configured to be accrual or not and at the end of its term, the principal balance will roll into a traditional p+i repayment amortization with its own terms. Finally, there is a selector for refinancing the initial loan. It is based on a defined cap rate and LTV at whatever month the ReFi is being defined to happen at. This will flow through cash accordingly.

For the option of a joint venture, the final periodic cash flow goes to a monthly waterfall distribution schedule that contains IRR hurdles of which cash is split differently between the sponsor (GP) and investor (LP) up until each IRR hurdle has been achieved by the LP pool. An exit IRR and equity multiple as well as DCF Analysis uses this data to be determined. Of course, if this is not a joint venture, simply put a 0% in the LP cash section and equity contribution section.

A final income statement-like executive summary will show the annual financial forecast and cash flow / cash distributions and there are over 10 visualizations for all key aspects of the investment analysis.

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