Use Excel to create all solutions and submit an excel document for final HW submission. Use the mathematical functions within excel to make all calculations. Partial credit is only possible if functions are used in all calculable cells.

You hired an investment firm and a developer to build an office building on a 4-acre plot of land. Construction will begin at the end of 2020 (December 31, 2020). Use the follow deal structure to set up a development pro forma:

Land Size: 4 acres

Land Price: $160 square foot

Floor Area Ratio: 10

Leasable to Gross Area Ratio: 90%

Hard costs per square foot $175

Soft costs per square for $90

Completing time is 2 years

LTC (loan-to-cost) is 70%

Annual interest rate is 5% and interest is capitalized

Debt Drawn: Only when equity is exhausted

Assume that 50% of land cost is paid in the first month and 50% in the last month

Hard and Soft Costs are distributed evenly (This is not the case in real life but its an assumption to make your model easier).

Investor contribution is 80%, the rest comes from developer.

Instructions Make a development pro forma (The construction phase of the deal). Show the 2 years construction period monthly. When you are done, show the amount of the construction loan that needs to be refinanced.