3 Hour Condo/Rental Excel Test - What Can Be Expected
Going off an old case that wants you to build out a condo and a rental scenario separately. Curious what can be expected in terms of detail for output and had a question on the condo scenario. Assuming down to IRR, EM, and YOC returns for each deal.
The case provides construction costs, lot SF & FAR, basic construction timeline (x year for pre dev, dev, lease up), target $ for condo sellout and rental rate as well as expected retail rent and rental opex. Provides debt/equity breakdown high level. Output in a rental and condo model for each scenario and a memo in the 3 hours.
What would they expect on the condo breakdown for square footage. Say the max buildable/gross sf is 100,000 sf based on the FAR provided. From there I assumed a 20% loss factor for lobby, elevators, hallways, mech so now at 80,000 sf on the condo scenario so far. I then assumed 2,500 sf for retail at the base ground floor so that leaves 77,500 sf - this is the sellable square footage right for condos right?
I am just assuming the 2,500 gross sf is 2,500 rentable sf as it's just a retail portion on the bottom to one tenant NNN.
In a 3-hour condo/rental Excel test, the expectation would be to demonstrate a comprehensive understanding of financial modeling, specifically tailored to real estate development scenarios. Here's a breakdown of what can be expected in terms of detail for output, along with insights on the condo scenario square footage calculation:
Condo/Rental Excel Test Expectations:
Construction of Financial Models: You'll need to build separate financial models for both the condo and rental scenarios. This includes inputting provided data such as construction costs, lot square footage (SF) & Floor Area Ratio (FAR), construction timeline, target condo sellout and rental rates, expected retail rent, rental operating expenses (OpEx), and the debt/equity breakdown.
Detailed Output Analysis:
Memo Creation: Summarize your findings, assumptions, and any relevant analysis in a concise memo. This should include a brief overview of the financial models and key takeaways from your output analysis.
Condo Scenario Square Footage Breakdown:
Your approach to calculating the sellable square footage for condos seems logical. Here's a step-by-step breakdown:
In such a test, accuracy, attention to detail, and the ability to work efficiently under time constraints are crucial. Ensure your models are clear, well-organized, and easy to follow, as this will also be part of the evaluation.
Sources: Basic Overview of the Consumer Sector, Life in Development - Expectations vs Reality, Life in Development - Expectations vs Reality, HOW DO YOU DETERMINE YOUR UNIT MIX?, Multifamily Rent Per Square Foot vs. Rent Per Unit
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