Other Studies

Most other studies can be lumped under the heading "feasibility studies." The essential task here is answering the question, "Is it a good idea, or not?" 

That simple, and that complicated too!

Its complicated because the project often lacks concrete form, which means its even more difficult to protect against cost overruns and delays in earning income.

The key is having the experience to envision all the possible causes that might come into play on the particular project - then taking the steps needed produce a favorable outcome.

Case Study                                            

A Special-Use building couldn't find its way out of a financial quagmire, no matter how it was managed.  After studying the contributions from each profit center, it became clear the solution was to eliminate a cherished feature of the building - a restaurant. 

Free of this dead weight, another party was enticed to rent the remaining space. The revenue form this "bankable" tenant became the wherewithal to convert the old restaurant to new office space, which added another full floor of rentable area because the old restaurant was two stores high.

In addition to improving the financial statements, the building was also transformed into a genuine Mixed-Use building. After seeing that the owner did his homework, the lender agreed to finance the conversion of the old space to new offices, adding a new chiller system and lobby in the process.  

It required almost one and a half month of full time effort, and countless scenarios (pessimistic, optimistic and most-likely but it was worth every hour to the frustrated owner. The net result was an increase in net worth from zero to approximately $7.5 million.

 

Other Services

In addition to feasibility studies, we also offer other financial models and studies, such as Property Valuation models for the purpose of determining a sales price.

The key here is to determine what the asset will be worth in several years hence, all things considered, and price it according to its Present Value today.

Another example of Other Services is testing the effect of various rental rate increases and recommending the ones that serve the tenant and landlord alike.

In development project, another service is testing the proposed purchase price of land in order to determine whether the finished project can afford that price.

Rather than adding more examples, we'll leave it to you to imagine all the possible ways to use the intelligence and insights gained from cash flow models in the hands of an experience real estate person.

 

In Closing

In the realm of feasibility and similar studies, the motto listed on the Home Page could be revised to read, "Making money is an art - Not losing it is a science."

 

 

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