College - Author 1
College of Architecture and Environmental Design
Department - Author 1
Construction Management Department
Degree Name - Author 1
BS in Construction Management
Date
6-2021
Primary Advisor/Subject Matter Expert (SME)
Eric Brinkman, College of Architecture and Environmental Design, Construction Management Department
Abstract/Summary
This real property development project walked through the steps and procedures that are typical for real property development. The project focused on a conceptual multi-unit student housing project located near Cal Polys campus. The rental market in San Luis Obispo is very competitive and through market and financial analysis, it was determined that there is a demand for projects like the one proposed. The project walked through the processes associated with the financial analysis of a potential construction project in San Luis Obispo. The project identifies a site, creates a budget both for construction, development, and design costs, then analyzes them in a Pro Forma. The information is then compiled into a spreadsheet that produces cash flows, net operating income and a rate of return. The goal of the project was to create a product that had at least a 10% rate of return, which is the lowest rate generally acceptable to financial stakeholders on this type of project. This project cleared that mark with a 10.7% rate of return, with a potential to increase the rate if the purchase price of the property could be negotiated down or if the project team could increase net operating income.
URL: https://digitalcommons.calpoly.edu/cmsp/460
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