Author Archives: blake

New Feature! Special Treatment for Sale Proceeds in Equity Waterfalls

We are pleased to announce a new feature in Version 9.1 which allows for special treatment of the reversion (sale) proceeds withing the Equity Waterfalls. In prior models, the proceeds from the sale of the property were applied to the same Preferred Return and Cash Flow Hurdles.

Now, beginning in Version 9.1, you have the ability to select through a drop-down menu whether to include the sale proceeds as normal cash flow (as before), or to treat the sale Independently. If treated independently, you can then enter the percentage split that the sale will enjoy.
Cash Flow Distributions

An example of this scenario would be an agreement between a Developer and an Equity Investor in which the sale of the property will result in a 50/50 split of the proceeds, regardless of the status of the equity waterfalls from the cash flow. This can often be an incentive payment for the Developer for the successful completion of the project and project returns.

We hope you enjoy this new feature. Please be sure to use our Contact Page to recommend any new feature you would like to see included in future versions!

Version 9 – Exciting New Features

We are excited to announce many new improvements to our discounted cash flow models. These improvements have been in development and testing for several months and expand the capabilities of models as well as simply some of the processes. A list of these additions/improvements is available below:

Reserve Accounts

One of the new exciting features in this version is the addition of three Reserve Accounts. These accounts can be funded at the start of your project and/or contributed to annually.

These Reserve Accounts will allow you to offset the expenses that occur (including taxes) which might result in a cash need in any given year.

Upon the sale of the project, any remaining funds are returned through the cash flow of the final year. This can have a significant positive impact on the IRR.

Rent Roll

We are excited to announce that we have completely redesigned our Rent Roll and how it operates. After many months of development and testing, we believe that this new system will be easier to understand and use than the previous rent roll.

The new rent roll spans 11 columns and operates in a vertical fashion. As before, you only need to insert data into the orange cells.

Rent Roll

Adding a New Tenant

To add a new tenant to the rent roll, simply begin typing on the next line. If the Suite number is different than the suite above it, the system will recognize it as a new tenant. If the Suite number matches the entry above, the system will recognize the entry as a continuation of the same lease.

New Tenant

Rent Steps

The new rent roll can accommodate rent steps for any tenant. In order to add a new rent step, simply start a new line under that with the step dates and lease rate. The system will recognize a continuation of a tenant’s lease based on the Suite number. If a date between lease steps is entered incorrectly, the system will shade the cell red to alert you.

Download Now

In addition to many bug fixes throughout, we have put a lot of time and energy into refining the presentation of these models. Please download today and let us know your thoughts!

Multifamily/Self Storage Lease Up Schedule

Today we are excited to announce a feature to our Multifamily, Mixed-Use, Self Storage and Student Housing Models. The Lease Up Schedule will assist you in forecasting monthly and annual lease up in a new construction or development model. It is also useful in projects where you are bringing an existing project up to stabilization.  Based on just a few data inputs, this easy to use schedule will calculate:

  • Units Leased in each Period (monthly and annual)
  • Average Occupancy for each Period (monthly and annual)
  • Average Vacancy for each Period (monthly and annual)

Blog 2016-6 Lease-Up-Schedule

Additionally, the average annual vacancies for each year will also be carried into the Cash Flows worksheet. This will provide a much simpler method to forecasting project performance over a construction, lease-up, and stabilization period.

Please feel free to download the latest models to take advantage of this new feature.

Specify your Budgeted Construction Interest Amount

By popular request, we have added the ability to specify the budgeted amount of interest to be applied during an interest-only period. You can now make this specification on the Assumptions tab while entering the details of your Interest Only loan.

Construction Interest

On the Cash Flow tab, this amount will be allocated annually as needed throughout the term of the Interest Only period.

In the event that the budgeted interest does not entirely cover the interest expense during these period, the remaining interest expense will be passed through the cash flow statement. If there is excess funds in the interest budget, these will not be utilized in the model.

Please feel free to download the latest models to take advantage of this new feature.

Change the Starting Balance of a Construction Loan

How the Fund-Up Interest Only Loan Works

When you create a new model with a fund-up interest only loan, the default behavior is for the program to begin the loan at $0 and then evenly increase the loan amount over the number of months specified.

For example in the scenario below, even though the term of the interest only loan is 36 months, the user has specified that the loan will be fully funded by month 18.  Therefore the loan will fund at a rate of $555,556 per month for 18 months and then remain fully funded for the remainder of the interest-only term.

Blog 2015-7 IO Funding Status

How to change the Beginning Balance

Occasionally you may want to have the interest-only loan begin at a value other than $0.  For example, a construction loan may be partially funded at closing to cover some of the land costs.  To accomplish this you must switch over to the Loan Amortization tab.  There, you can enter the Beginning Balance for the first month in cell “E51”.  The model will automatically take the remaining balance and apply it equally among the remaining months to fund up.

Blog 2015-7 Begining Balance

How to Quickly Change the Hold Period

As users of these models ourselves, there are many times that we will be reviewing the charts and reports and wonder what the results would look like with a different Hold Period.  We realized that if it was cumbersome for us to constantly go back to the Assumptions tab to change the hold period, then it probably was for our customers as well.  To help solve this issue we have implemented a new shortcut to quickly change the hold period from anywhere within the worksheets.  Simply press Ctrl + Shift + H (“Hold”)* and enter a new hold period.  You will see all of the charts and reports change instantly. 

Ctrl + Shift + H

Blog 2015-7-Change Hold Period

Please let us know how you like this new feature or suggest others for us to consider here.

*Please note that macros must be enabled for this feature to work.

Introducing Version 8.0

After several months of development, Real Property Metrics, Inc. is proud to introduce the latest version of our Microsoft Excel-based commercial real estate investment models.  Below are some of the updates that we have been working hard on:

Operating Reserve Accounts

We have added Operating Reserve Accounts to each of our models in the ‘Cash Flow’ worksheets.  Through these accounts you can now keep track of the reserve funds from your operating expenses and net them against Cap Ex or Leasing/Tenant Improvement Costs when they occur. 

Blog 2015-7 - Reserve Accounts

In the Commercial and Mixed-Use models, we have even built in the ability to auto-calculate the annual reserves, including caps on the reserve balances.

Cash on Cash Equity Investor Returns

Another significant change is the addition of Cash-on-Cash hurdles to the Equity Investor Returns waterfalls.  While the previous versions have been based on IRR scenarios, each hurdle is now user-selectable between IRR and Cash-on-Cash returns. 

EIR - Input Box

In addition to these great new features, we have included several bug fixes and formatting improvements.  We hope you enjoy using our models.  As always, if you have a current subscription or would like to try them free for 7-days, please download the new models here: http://realpropmetrics.com/freetrial/download/.

New Features in Version 7.2

RPM is proud to release version 7.2.  Here  are some of the new features:

  • Removed protection from formulas on the Cash Flow tab.  Users are free to edit and view all cells.  (Protection is still in place for the RPM logo.)
  • Charts and Summaries now automatically reformat to display just the Hold Period.
  • Added comments to certain cells to aid instructions.
  • Improved Canadian amortization calculation.
  • Added a Blended Rate tool to the Rent Roll tab in the Commercial Model.  This will make calculation step rents much easier. 
  • Improved Mac compatibility.

Also, we have improved our registration option so that you may test out a new version release even if you used your free trial period for a prior version.  You will now receive an additional seven days to try out the new features!  Please feel free to give them a try here.

A New Tool to Calculate Step Rents

One of the biggest issues when calculating step rents  in the Commercial model is that the model assumes that all rent steps occur at year-end.  If a rental rate changes mid-year users had to manually calculate a blended rate for that year and enter it into the rent roll growth area.  RPM is excited to introduce a new tool to easily calculate blended rates for step rents.

You will notice on the Rent Roll tab of the Commercial and mixed-use models that there is a new orange button above the rent growth section.  To create a blended rental rate in a give year, select the cell for the year that the particular rent will be increasing and click the new orange button.  You will be asked to enter a new rental rate and any associated downtime/free rent.  It will then calculate the blended rental rate for that year along with the next year based on rent growth from column “M” (if any).  This should make Step Rent scenarios much more simple to calculate.

BlendedRate

You will then be asked to confirm the new blended rate before it is applied.

BlendedRateApprove

How it works

The  way this new feature works is that it uses the rate in the prior year to create a blended rate in the current year.  It then goes forward and inputs the new rental rate in the next year.

This works very well for tenants whose step rents are spaced more than one year apart because there will always be a full year at the new contract rate which the model will use for the next blended rate. However for tenants with annual step rents you will notice that in the second step the model will attempt to use the prior blended rate as the prior rental rate.  Be sure to change the Prior Rental Rate to the full annual rent rate for the prior year.

BlendedRate-PriorYr

We hope this new feature is helpful to you and look forward  to hearing your feedback.