FINANCIAL ANALYSIS EXAMPLES of the PRODUCT TYPES and REPORTS GENERATED
Apartment Acquistion & Disposition
Generally, values are some factor of a CAP rate based on MSA rents and a project’s market position as core, core+, or value add. The following example was a project we worked on with the owners as they completed the development and entered the lease-up period.
This is a project whose confidentiality is paramount. Comprised of 123 market rate units, 2 overnight rental units for tenants’ visitors, and 10,000 square feet of retail space. One space of about 5,000 sf was leased out with a 10-year to a restaurant, and two spaces were under 5 years leases. One is a yoga studio, the other a fitness studio. Two other spaces were still available at the time of our analysis.
LINKS to Reports available for Tryesta and all other projects we underwrite:
This is a project whose confidentiality is paramount. We have been working with the seller for more than a year. Over that time three site plans have been developed and Proformas for each set of assumptions have been developed.
Proforma Site for Plan 3 (The most recent site plan)
High-Density Urban Infill Development:
Hope Street - Down Town Los Angeles (DTLA)
Seven Parcels totally slightly over 56,000 sf, comprised of mostly abandoned warehouses with a FAR that allows 256 condos or 309 apartments, a density of approximately 256 units per acre. Price for unentitled land: $29,000,000.
This was a situation where a seller had a set price in mind and was convinced the density potential justified a 25-story building. Our prospects felt the area could not support a project that dense. We did a land residual study to facilitate conversation between the parties.
Land Residual Study - Wilshire BLVD Initial Abstract. The land residual uses two Proformas to compare the seller’s hard line asking price to the return metric our buyer would find acceptable.
Residential Land Development & Home Building
This is one of the projects whose confidentiality is paramount. This is/was a family owned asset for more than 100 years. They had express an interest in pursuing the highest value possible and were open to a partnership, joint venture, providing debt or any other arrangement that might allow them to participate in the upside potential. We approached the project from the perspective of a buyer with the intention of providing an offer that generated the highest return to the owner/seller.
Comprised of about 600 acres with approvals for about 1400 homes, schools, medical facilities and retail this project is a major development for the city and included rebuilding bridges, interesections and other infrastructure around the town.
Regarding the residential uses we looked at selling super pads, blue top lots, finished lots and even the possibility of building some homes to compare which business plan produced the most return to the sellers. We produced dozens of scenarios. Only one is shown here.
The significance is during the 10+ years it took to entitle a line item budget of more than 600 items was developed by the civil engineer and other consultants. Our financial model shows each line item as a detail so that all parties could cross check the work and make sure everything was included.
Proforma showing seller contributes 10% of land value as equity for participation. This scenario generated $76,000,000 for the seller, $50,000,000 in land price, $26,000,000 as profit on a $5,000,000 contribution.
A great infill equestrian home building potential in the heart of Orange County. Unfortunately, the approvals were appealed by opponents all the way to the California State Supreme Court where the owner eventually lost.
Proforma showing a 39-lot development in which 32 large homes will built and 7 custom lots sold.
Redding Finished Lot and Homebuilding
This was a partially developed land development project with several product (lot) sizes that presented the perfect opportunity to finish the development, sell some finished lots and build so nice homes.
Hemet Equestrian Ranch
This property is an equestrian ranch with a significant water well on site. The seller was in his mid 80’s and retiring. He owns equestrian properties in California for his summer stables for the Del Mar race track and had properties in Florida and Colorado.
Our task was to determine a highest best use fro some investors out of Canada. The question; Would it make more sense to sell 220 paper lots, or 220 homes in two product lines or a combination of lot and home sales?
Proforma – Selling 220 paper Lots
Proforma – Selling 220 homes
Proforma – Selling 110 lots and 110 homes.
Bay Area 110,000 square foot Office Asset
This project represents a typical scenario in urban infill development where an existing asset is located on property that has additional acreage suitable and possibly already approved for additional development presenting the opportunity to convert a proposed and approved additional office development to a residential use. In this case we pursued the property with the intention of converting the approved 155,000 sf for additional office space to an apartment development to exist alongside the 97% occupied high rise office.
Proforma 1 for a standalone apartment development. Assumes the apartment owner would not want to take ownership of the office building.
Proforma 2 for a combined ownership of the office and apartment development.
Proforma 3 for a standalone office building ownership.