Financial Feasibility and Market Analysis for Real Estate Project

Step 1-Assumptions

This assignment has two parts; financial feasibility and market analysis. 

Loan assumption-Banks lend for the development as such: 70% Loan to Value permanent loan on new project, interest rate is 6% for 20 year. 

The vacancy rate is 5% and the discount rate is 13%. 

Other assumptions should be addressed (e.g., expenses, taxes, market cap rate, etc.) and also be based on your first assignment including the total size of the property that you expect to build, the number of units planned, etc. 

Hard cost-Use the Altus Cost Guide to estimate your expected hard costs.  

Estimate that soft costs (non-interest) will be 20% of hard costs.  

Add hard costs, soft costs (non-interest) and land costs to estimate the project cost.  

Explain everything, describe, justify. 

Estimate project value- calculate the NOI and use the cap rate to estimate the property value when complete.  (For industrial, retail, and office buildings, assume triple-net leases.)

Calculate the profit.  

Explain and describe everything.   Document your sources.   

Show you work in a table and answer the questions; Is this project feasible? How much equity is required? Explain how to arrive at your conclusion. 

Provide alternative FDBD analysis in a table using different assumption. If the project does not work, what can you do to make it financially viable? 

Give a recommendation and conclusion. 

Identify at least 3-5 competitors closest to your project. Explain why you choose them as the competitors. 

Determine the approximate square footage of the competitors and the distance to each them. 

Calculate the braking point (BP) and provide the equation and the results along with the names of the competitors, size, and the distance in excel file. 

Draw PMA on a map-explain how to determine the PMA.

Define your PMA at the neighborhood level, list the neighborhood, and provide demographic information including total population, population growth, median income in a table. 

I like crisp writing, perfect grammar and professional-quality presentation.  

Introduction (which starts by telling me where your property is and what you are planning to build) 

All the materials from steps 2 to 6 (Tables-Table 1 assumption, Table 2 FDBD analysis, Table 3 alternative FDBD analysis, Table 4 competitors, and Table 5 Demographic characteristics)(Figures-Figure 1 PMA map and Figure 2 PMA map at the neighborhood level)

Include an introduction and a conclusion (which summarizes everything in the document).  Your conclusion should also include your recommendation about whether this is a promising idea or not (and why).