DEVELOPER will project returns on a Real Estate Development project, using various measures of profitability. 

No liability is assumed by the author with regard to any misfortunes arriving from the use of this software.

•  Use the «New» command to input underlying data for a valuation.  The default values in the «New» window are an example of input.

OUTPUT:
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•  Total Cost:  This is the total of construction costs, plus leaseup costs, plus opportunity cost of capital at the input discount rate.  This program converts construction costs to monthly cash flows, following an "S-shaped" curve for cumulative construction costs (i.e., few disbursements at the beginning of a project, half of the cumulative disbursements occurring halfway through the construction, etc).  Leaseup costs, if any, are straight-lined over the leaseup period.  Note:  The difference between Total Cost and Completion value will not be the same as the NPV, due to timing differences.

•  Markup over Historical Cost:  This is the value at completion of the project, as a percent increase over historical costs (Construction Costs + Leaseup Costs -- with no cost of capital considered).

•  Developer's Profit:  This is the value at completion of the project, as a percent increase over the Total Cost, that is, less Construction and Leaseup costs, and Cost of Capital.

•  IRR:  This is a simple, unmodified IRR, using monthly cash flows based on the Construction Costs, Leaseup Costs, Value at Completion, and Income, if any, during Leaseup.

•  NPV:  This is the net present value of the project at the input discount rate (cost of capital).
	

INPUTS:
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•  Construction Costs:   Use the total undiscounted dollar cost of the project from inception through shell completion.  

•  Leaseup Costs:   Use the total undiscounted dollar leaseup costs (Tenant Improvements, etc.) from shell completion to fully-leased.  Do not include costs already accounted for in construction costs.  

•  Number of months to Construct:   This must be a positive integer less than 100.

•  Number of months to Lease:   This must be a non-negative integer less than 100.  Use «zero» if completely pre-leased.

•  Value at Completion:   Use the expected dollar value of the project if sold at completion (leaseup).

•  Percent Cost of Capital:  This is the annualized discount rate used in the NPV, Total Cost, and Developer’s Profit calculations. (For example, express 9% annually  as «9.00».) This rate has no effect on the IRR. 

•  Percent Income during Leaseup:   This is the Average Annual Income as a percent of Cost during leaseup.  (For example, express 6% annually  as «6.00».) The program converts this to monthly cash flows.  By varying this figure and the leaseup costs and period, different leaseup assumptions may be modeled.