Learn how to build an Office Real Estate Financial Model from scratch based on a real Case Study.
This course is based on the following Case Study:
Background
As an investor at Udemy Capital specializing in office building developments, you are planning to purchase a land plot to develop a modern, build-to-suit office building for a major tenant who is willing to sign a 10-year lease (with no break options) for their headquarters. As part of Udemy Capital’s underwriting process you need to model the following assumptions on a monthly cash flow basis. If you think, that some of these assumptions may not make sense or could be more accurate, feel free to change them as long as you justify it properly.
Land & Acquisition Costs
Location: Barcelona’s Prime Office Area
Purchase of the Land on 01 January 2025
Land Purchase Price: to be determined by a minimum Levered IRR (LIRR) of 15% and an Equity Multiple (EM) of at least 1.80x
Buildability: 10,000 sqm
Real Estate Transfer Tax: 10% over Land Purchase Price
Notary & Registry: 0.25% over Land Purchase Price
Buy-Side Brokerage Fee: 1.50% over Land Purchase Price
Due Diligence: 75,000€
Development
Project: 10,000 sqm
Construction Period: 18 months starting in Month 1
Hard Costs: 1,800 €/sqm
Soft Costs: 15% over Hard Costs
Contingency: 5% over Hard + Soft Costs
Leasing Costs: 1 month of Rent
Tenant Improvements: 23.50 €/sqm to be paid out for 2 months and starting the first month of rent
Operations
Gross Leasable Area (GLA): 10,000 sqm
Rent: 23.50 €/sqm
Yearly Rental Bump: 2.50% on each lease anniversary
Free Rent: 5 months of rent
Operating Expenses (Opex): 15% over Gross Rental Income
Non-Recoverable Expenses: 10% of Opex
Building Capex Maintenance: 5% over Gross Rental Income
Exit / Sale
Holding Period: 5 years
Exit Cap Rate: 4.25%
Selling Costs: 1.50% over Sales Proceeds
Acquisition Loan
None, land will be acquired with Equity
Development Loan
Loan to Cost (LTC): 60%
Arrangement Fee: 1.00% over Loan Proceeds
Equity First Structure
All-in interest rate: 5.50%
Repayment: bullet at Refinance
Refinance Loan
Refinance Month: at stabilization after TIs and Free Rent Periods
Arrangement Fee: 1.00% over Loan Proceeds
LTV: 55% of value at refinance
Cap Rate at Refinance: 4.75%
All-in interest rate: 4.50%
Amortization: French amortization schedule
Loan Term: 15 years
Outputs
In order for your Investment Committee to consider this deal you will need to show:
Annual Cash Flow Tab
Land Purchase Price
Levered IRR
Equity Multiple
Profit
Equity Peak
Sensitivity Tables
- Rent and Hard Cost
- Land Purchase Price and Exit Cap Rate
Debes tener en cuenta que los cupones duran maximo 4 dias o hasta agotar 1000 inscripciones,pero puede vencer en cualquier momento. Obten el curso con cupon haciendo clic en el siguiente boton:
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