Parking Lot Investment Financial Model Template

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Video Overview:

Parking Lot with 7 Revenue Streams and Waterfall Distribution with Return of Capital, Preferred Return, and Two-Tier Promote Structure Investment Model.

This model can be used to analyze the financial/investment return of parking lot investment. The model is dynamic for a variety of user inputs and unique investment situations. The model has assumptions for different purchase metrics, investment structures and fees, equity (GP/LP, prorate partnership, single investor), debt (amortizing/interest only, interest-only period then amortizing, fixed/floating rate, loan and amortization periods up to 30 years), capital expenses, and a variety of revenue and expense assumptions.

This model is more advanced than a typical parking lot investment model as it allows multiple income streams (permit parking, weekday hourly, weekend hourly, event parking, valet parking, vehicle detailing, and other income) rather than a single source. The model is also highly dynamic when it comes to modeling the capital stack, fee structure, and waterfall cash flow distribution.

The waterfall cash flow distribution in this model includes a return of capital, preferred return, and a two-tier promotion structure. Although the model is complex and dynamic for a variety of situations, it has all assumptions consolidated on one tab (assumptions) aside from the floating interest rate assumption on the debt schedule tab (if applicable for your case).

In addition to the ease of use, the model includes a neatly formatted executive summary with all important information that is formatted to be PDF and/or printed. This model is a go-to analysis tool for investors looking to profit off a parking lot investment.

The model is broken down into the following sections:

Executive Summary:

Provides the high-level reporting output from the analysis based on the user assumptions. The output includes:
– Sources/Uses
– IRR and MoC return metrics (gross unlevered, gross levered, general partner levered, and limited partner levered)
– Capital account balances (debt/equity)
– Consolidated proforma financials from NOI to FFO to AFFO to FCFE
– Operating day schedule showing a breakdown of operating days for each revenue stream category
– Year 1 revenue attribution to see how each revenue stream is contributing to total revenue

Assumptions:

All inputs for the model aside from the floating interest rate assumption (if applicable) are on this tab. The yellow-filled cells with blue text are for user inputs – only type into the yellow fill with blue text cells. The blue-filled cells with blue text are user dropdowns. Please use the drop-downs to make your selection. The tab is organized into the following assumptions groups:

– Property Information: Inputs for the property characteristics, such as an address, city, state/province, and total parking spaces.
– Purchase Metrics: Input the purchase price of the property. This section includes a calculation of the year 1 UW NOI, acquisition cap rate, and the purchase price per parking spot.
– Investment Structure & Fees: This section of assumptions provides the hold period of the investment, closing cost assumptions, fee assumptions (if applicable) for acquisition fees, management fees, construction management fees, target yields, and the promoted structure. There is an assumption for G&A expenses outside of the property, for example, if you are investing through an entity where you need to carry G&A expenses for corporate accounting, audit, tax returns, or legal fees. In addition to the acquisition assumptions, this section also holds the exit assumptions for applying cap rate compression/expansion on exit as well as exit fees paid to a broker as well as a manager (if applicable).
– Equity: This section holds the assumptions for the investment partners. The assumptions can be for a GP/LP, 1 partner (leave the second partner as blank), or a 50/50 JV with 2 partners.
– Acquisition Debt: The debt calculations in this model are very complex and allow for monthly and/or annual prepayments, fixed or floating debt, interest-only and amortizing, as well as amortizing with an interest-only period, as well as origination fee assumptions. The model includes the option to roll the upfront capital expenses (improvements) into the debt balance (if applicable to your analysis). If you use floating rate debt, the floating rate can be entered into column E on the debt schedule tab to apply a monthly floating interest rate. The floating interest rate assumption that can be entered on the debt schedule tab is the only assumption not on the assumption tab in the entire model.
– General Assumptions: This section includes the analysis date input for version control, closing date, the currency being used, vacant downtime in case the property will not be rentable for a period when it is being improved after the acquisition, as well as inputs for upfront capital expenses and any working capital liquidity requirements.
– Permit Parking Revenue Assumptions: Assumptions can be input for the number of spaces you want to lease to monthly permitholders meaning they will not be available for hourly or event rental. This section includes an input for occupancy of the spaces as well as the monthly fee.
– Event Parking Revenue Assumptions: Assumptions in this section are related to any event parking that will be hosted at the investment. The number of events per year, occupancy, and the rate per event are input in this section. For simplicity, the number of event days per year are subtracted from the weekend operating days to not double count the event parking income alongside the hourly weekend revenue income.
– Weekday Parking Hourly Revenue Assumptions: Assumptions can be made for the number of hours each space is rented per weekday as well as the cost per hour.
– Weekend Parking Hourly Revenue Assumptions: Assumptions can be made for the number of hours each space is rented per weekend as well as the cost per hour.
– Valet Parking Revenue Assumptions: Assumptions can be input for the number of valet customers per year and the average revenue per valet customer.
– Vehicle Detailing Revenue Assumptions: Assumptions can be input for the number of detailing customers per year and the average detailing rate per customer.
– Other Revenue Assumptions: An assumption can be made for other income if there are other revenue sources and the annual revenue growth that can be applied to all of the revenue stream rates.
– Operating Expense Assumptions: This section provides the operating expense assumptions, including insurance, property tax, staffing, contracts, repairs and maintenance, utilities, valet expenses, detailing expenses, G&A, advertising, and PM Fees.
– Capital Expenditures Assumptions: Assumptions can be made for any recurring capital expenditures or value-add upgrade improvements for the parking lot.

Calculations:

This tab completes all calculations based on the assumptions the user inputs on the assumptions tab. The calculations include:
– Operating day schedule
– Revenue projections
– Proforma financial statements
– Fee basis
– Capital Balances
– Investment Cash Flow
– Sources and uses
– Returns
– Waterfall cash distribution

Debt Schedule:

Models the debt payment schedule based on the user assumptions. If the user needs to model using a floating rate, the floating interest rate needs to be input in column E on this tab. This is the only area in the model with an assumption aside from the assumptions tab.

Data Validation: This contains the data validation being used in the assumptions tab.

This model is dynamic and complex but also easy to use, with neatly organized assumptions that can be applied to various investment cases.

File Types:

– Demo Version: .pdf

– Editable Excel File: .xlsx