Retail Construction Financial Model - Real Estate Underwriting

Model out potential new construction of retail buildings with this template. It was built for an actual client that is using this framework to analyze real deals. The basic framework is as follows: Purchase land, construct building, build out tenant spaces, financing with some debt, operate for up to 15 years, and then exit. The model uses monthly periods for accurate cash flow analysis.

$75.00 USD


retail construction

After purchase, the template will be immediately available to download. This model is also included in the Real Estate Bundle, Retail Bundle, Construction Bundle, and The Super Smart Bundle.

Template Features:

  • Up to 15 tenants.
  • Up to 15 years.
  • Dynamic lease-up per tenant.
  • Define rent per square foot by tenant.
  • Tenant improvements and leasing commissions configurable by tenant.
  • Drives down to net operating income and cash flow per month and year.
  • Includes option to finance initial costs based on drawing on an i/o loan.
  • Joint venture ready, IRR hurdle waterfall with dynamic contribution / distribution inputs (GP/LP).
  • Dynamic cost schedule for ongoing expenses during and after lease-up.
  • Includes IRR, Equity Multiple, cash-on-cash for the project and GP/LP individually.
  • Displays monthly/annual unit economics of each tenant over time.
  • Includes a Sources and Uses summary.
The template was designed for a construction project that involves building a retail space and renting it out for a period of up to 15 years. Here's an overview of its core functionalities:

General Assumptions:
  • The template includes forecasting tools that project costs and returns over a timeline of up to 15 years (180 months).
  • It estimates minimum equity investment and provides Internal Rate of Return (IRR) calculations, both monthly and annual, to gauge the profitability of the project.
  • It includes projections for financing through loans and equity, as well as operating burn/surplus to guide cash flow management.
Construction Costs:
  • The construction cost section outlines the detailed monthly cash outflows related to building the retail space. This includes individual line items for each construction cost category (though specific items were not filled in, the template is structured to accommodate detailed inputs).
  • The structure allows tracking expenses by month, enabling users to align cash flow projections with construction milestones.
Operating Expenses (OPEX):

  • The OPEX sheet likely helps users estimate the ongoing costs of running and maintaining the retail building, once the construction is completed. This would include costs such as maintenance, utilities, property taxes, and other operational expenses associated with leasing out the building.
Loan and Debt Management:
  • The loan section provides a framework for inputting debt terms, including the loan amount, interest rate, and repayment schedule, allowing for tracking of financing costs over the life of the loan.
  • This is crucial for understanding the leverage on the project and the impacts on cash flow due to debt servicing.
Pro Forma Financials:
  • There are both monthly and annual pro forma sheets that summarize projected income, expenses, and net cash flows over the course of the forecast period. These pro forma statements allow users to track profitability and financial viability of the project over time.
Discounted Cash Flow (DCF) Analysis:
  • A DCF analysis is included to estimate the net present value (NPV) of the project, which helps determine the overall financial attractiveness of the investment, considering the time value of money.
Waterfall Structure:
  • The waterfall section is designed to distribute cash flows among stakeholders, typically based on predefined tiers of returns. This would be useful for projects with multiple investors, ensuring that cash distributions are allocated fairly based on the project's financial performance.
Industry Context:

In the context of the retail real estate industry, this model is valuable for developers and investors looking to forecast the financial performance of a retail construction project. The ability to project costs, returns, and rental income over a long-term horizon (up to 15 years) is essential for determining the feasibility and profitability of such ventures. Retail spaces, especially those leased over extended periods, require careful cash flow management to account for construction phases, operating expenses, and debt repayment schedules.

By using this template, developers can ensure that they have a clear understanding of their financial obligations and potential returns, allowing for better decision-making, risk management, and investment planning.

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