Deconstructing the Development Pro Forma
Thursday, September 28, 2017
9:15 a.m. - 10:15 a.m. CDT
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Sources, Uses, Rents, Expenses, Return on Investment! Gap? The pro forma is a development budget that is central to every project. This skills-building session walks through the components of rental housing and commercial/industrial pro formas, analyzing risk and return, and the key factors when reviewing requests for local financial assistance.
This session focuses on advancing real estate development knowledge, building analytical skills, and problem solving. Many communities are faced with requests from developers for local financial assistance through tax increment financing, tax abatement, or other local sources. Before one can determine if the financing assistance request is justified, it is important to understand the basic components of the development pro forma. This session deconstructs a rental housing and commercial development pro forma to explain: 1) the types of development sources; 2) typical project costs; 3) information that banks require to finance a project; 4) how developers analyzes risk and return; 5) developer fees; and, 6) key factors a community should consider when reviewing a request for local financing assistance. Attendees will gain a better technical and analytical understanding of pro forma components, questions to ask developers requesting assistance, and how assistance can impact a housing development project.
Jane Kansier, firstname.lastname@example.org