Mixed-Use Real Estate Model: Leverage and Joint Venture Options

 This is one of the most satisfying financial models I have done in the real estate space. It is for mixed-use properties, which means an investment in a given location / cluster of locations and each area can be used for different things i.e. residential / offices / food places / or what have you. Each 'use' is separated into its own development costs, operating assumptions, and exit caps, but they are all consolidated on the same model timeline with this Excel template. Model for up to 10 years.

$75.00 USD

Both the unit-based and sq. ft. based templates will be immediately available to download after purchase. This template is included in the Joint Venture bundle and Real Estate bundle.

mixed use real estate

Latest Update: Added Version Based Purely on SQ. FT. Inputs Rather than Units

Update to Financing Logic

The model starts off by letting the user define the name of each 'use' type for up to 7 different uses as well as the start year of the model. On each use type, there is a configuration for exit month, exit cap rate, and selling fees. This means you can plan to sell the various sections off at different times if so desired or all at once. Each 'use' has its own separate net operating income.

In order to allow for a separate net operating income for each 'use', the template allows assumptions to be entered individually for the rental income / occupancy / operating expenses. Each of the 7 types can be configured based on the following:

  • Development costs (monthly schedules for each with up to 22 slots for hard/soft costs). If this is an acquisition, the price can be entered here instead. Define if each slot is financed or not (yes/no selector) and the percentage of that cost that is financed.
  • Sq.Ft.
  • Units
  • Start Month of Rent
  • Rent per Unit/Mo
  • Max Monthly Rent
  • Avg. Rent per Sq. Ft. / Mo.
  • Rent Growth (yr. 2-3)
  • Rent Growth (yr. 4+)
  • Starting Occupancy
  • Monthly Improvement
  • Stabilized Occupancy
  • 17 operating expense slots and annual expense growth rate
  • Added a second template that is included in this download where the average rent per square foot and average expense per square foot are the primary drivers rather than units and rent per unit.
One of the biggest features of this financial model for real estate investment analysis includes the use of leverage. There are up to three different debt facilities that can be used for financing. Also, the user can opt out of debt and it can be an all-cash deal. That can easily be configured with the flip of a switch.

If leverage is used, the model automatically pulls any negative monthly cash flows from development into a construction loan that is interest only. On that loan, the interest can be determined to accrue or be paid monthly. There is an input box for the percentage of negative cash flows that are financed (the balance of negative cash flows will flow to equity required).

Based on the interest-only term, the initial loan will populate when that period is over and regular principal and interest payments will populate per the defined amortization terms. 

Finally, the user can also define a month that ReFi (refinance) happens and based on inputs for cap rate and LTV (loan-to-value), this new loan will be used to pay back the initial loan and distribute any excess cash to investors. The new amortization costs will then populate accordingly and upon exit of the entire project, that final loan will be repaid based on remaining principal.

I did include options for prepay penalty fees on both the ReFi event and exit event.

Final output summaries include:
  • Monthly and Annual Cash Flow detail (shows every single item per the assumptions)
  • Monthly Cash Flow waterfall (shows the cash flows going to the Investor / Sponsor (LP/GP) in each hurdle and in aggregate as well as the final exit IRR and DCF Analysis for each. Again, this does not have to be a joint venture and you can simply hit 0% for the investor pool if not needed.
  • Annual Executive Summary - this is sort of like an income statement in that it aggregates all the major line items and gets down to Net Operating Income. All major cash flow items are also included on here and the final cash contribution/distribution to investors / sponsors.
  • Visualizations - I really took time to make these visuals worthwhile and helpful. They give great clarity to all aspects of the deal over the 10 year period.
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