The ways people make money and lose money with building projects are not mysterious; but the methods used by developers to assess and manage risk can be opaque to those who don't use them every day.
The presenters will teach you how to use the basic tool for understanding a project's feasibility and profitability, the pro forma.
What does it mean when a developer says they "can't make the numbers work"? Which numbers? How do these numbers work over time? If the pro forma is based upon assumptions, how can I test those assumptions in the real world? How important is the price of land or the allowed density within the overall project?
This session includes an exercise in which participants will use a static pro forma to an infill rental housing project and test a range of real world problems, delayed entitlements, construction cost overruns, and changes in financing. Spreadsheet files of model static and multiyear pro formas will be provided.
R. John Anderson, Principal, Anderson Kim Architecture + Urban Design
Richard Hunt, CNU-A, Principal, Peloton Research Partners
