1. The document discusses the basics of real estate development modeling including goals of building confidence, enabling better analysis of investments, and increasing credibility. 2. It defines financial modeling as forecasting future financial outcomes based on current assumptions and provides "cardinal rules" for effective modeling like ensuring assumptions are reliable and annotating models. 3. It outlines key components of a development pro forma model including sources and uses, hard costs modeled as a bell curve, soft costs, furniture/fixtures/equipment, and financing costs.

1. Real Estate Development Modeling Basics Real Estate Financial Modeling

2. Goals 1. Build your confidence in your modeling capabilities 2. Enable you to analyze potential investments better 3. Increase your credibility with potential partners, lenders and investors 4. Make you more knowledgeable and valuable as a student or real estate professional

3. What is Financial Modeling? Forecasting of future financial outcomes based on current assumptions .

5. Modeling Fundamentals

6. Modeling Fundamentals

7. Modeling Fundamentals

8. What Makes Ground-Up Development Different?

10. Development Project Timeline – Office Tower with Below-Grade Parking

12. Sources and Uses – Uses are Input First

13. Land and Transfer Costs

14. Land and Transfer Costs Push Closing out as far into the future as possible (unless you cannot get building permits as the land’s “Contract Purchaser”)

16. Hard Costs

18. Soft Costs

19. Hard Costs vs. Soft Costs

20. Furniture, Fixtures & Equipment (FF&E) Near the very end of construction. Remember, we are dealing with physical space and logistics.

21. Furniture, Fixtures & Equipment (FF&E)

23. Financing Costs

24. Total Development Costs (i.e., Total Uses of Funds)

25. Total Development Costs (i.e., Total Uses of Funds)