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| | Resort Property
Financial Feasibility Studies...
Once
you have the market feasibility study completed for your  resort
development project, the next step is for the preparation of the three
(3) resort
financial feasibility studies. At their core, resort financial
feasibility studies are used to demonstrate the potential operating and
non-operating cash flows of the proposed project (in this case a
destination resort/resort hotel) via the inclusion of the following key
elements:
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Stabilized
Operating Analysis. This is an analysis that is used to set
the debt service coverage limitations of the project once it has
completed construction and development, and has attained its maximum
sustainable operating income production capacity. The findings
of this part of the financial feasibility analysis tells the
developer how much permanent mortgage debt the project will likely
be able to support.
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Construction
& Development Capitalization Analysis. The second point in
the pro forma financial presentation is an analysis of the project's
construction and development budget. This analysis is
presented (for the most part) in terms of the pro forma sources and
uses statement and its attending schedules. Careful
consideration is given to the hard construction cost line items,
soft cost construction line items and likely financing costs.
These findings are based upon the market feasibility study, the
Stabilized Operating Analysis findings and the costing reviews
undertaken by the design/builder (yes, you MUST go design/build if
you are seeking non-recourse construction financing). In
addition, the fractional tenants-in-common commercial real estate
syndication plan's theoretical net proceeds are layered on top of
the sources side, as well as sizing the condominium real estate
syndication plan (that is based upon the projected last month of
construction's capital expenses).
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Consolidated
Pro Forma Financial Presentation. The final leg is the
consolidation of the findings of the previous two (2) analysis
elements to provide a homogenous pro forma financial presentation
that includes all schedules, graphics, charts, notes and a detailed
presentation of all the empirical assumptions and the source of said
assumptions. The final report is approximately 250 pages and
includes an executive summary that is approximately 35 to 50 pages.
Continued
on the following page...
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Do
You Know The Secret?
When it comes to commercial real
estate development finance, it doesn't matter whether you need to raise
$5 million or $50 million, the out-of-pocket costs, advance fees and
project due diligence costs will always require the same relative
investment dollars the promoters have to fund. Do you know what
that amount is? Do you know the Secret? |
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