Reference no: EM133034783

Determining the Feasibility of Project 5789

Using the Pencil Test, you've now calculated the effective gross income, operations expenses, development costs, and the cost of capital for Project 5789. Based on this analysis, you have the critical information you need to determine the feasibility of the project. 

In this part of the course project, you will summarize your findings on Project 5789 for the owner of the development firm, completing some portions of the Development Package. Recall that the Development Package is a document that includes critical project information and metrics that developers can use to share information about their project with key stakeholders and investors.

On the next page, I need you to help me  do a memo to the owner in approximately 300 words that summarizes the following items: ( you xan write less and ill complete it of course

• Vision and Concept: Provide a simplified version of the owner's vision statement and concept, including information on the real estate market, municipality objectives, and developer strategy. Answer the following question: Is the project a good fit for this developer?
• Project Scope: Provide a general description of the planned building, including the overall size (square feet) of the building and the size of the different program spaces (retail, office, apartment, storage).
• Project Location and Site: Provide a summary of the key findings from the Location and Site analyses, indicating whether you think this location and site are a good choice for this project.
• Preliminary Financial Feasibility: Describe your overall findings from the Pencil Test. Make sure to address the following:
  • How does the annual net operating income (NOI) compare to the annual cost of capital?
  • What do the Obligation ratio and DSCR ratio indicate about project feasibility?
  • Your recommendation on whether to proceed with the project.