29 - [R3] Summary - C (Sensitivity)

Summary

  • :bar_chart: Enhanced Sensitivity Tables: Detailed explanations of how cost and sales metrics can fluctuate by increments and decrements to predict development outcomes such as profit per unit, development margin, and residual land value.
  • :bulb: Target Metrics Overview: Target development margin (20%) and internal rate of return (IRR) (10%) are central metrics, with tables dynamically adjusting based on these targets to explore variations.
  • :office: Vacancy and Exit Cap Rate Sensitivities: A separate sensitivity button calculates impacts of different vacancy rates and exit cap rates on key metrics like yield on cost, development spread, and levered equity multiple.
  • :arrows_counterclockwise: Dynamic Calculations: The recalculation process is separated from the โ€œsave and refreshโ€ function due to the extensive backend processing required.

Insights Based on Numbers

  • :pushpin: Target Metrics: The target development margin of 20% and IRR of 10% provide a benchmark to evaluate profitability across various scenarios.
  • :pushpin: Vacancy Rate Adjustments: Sensitivity tables reflect how minor changes in vacancy rates (e.g., 3% or 4%) significantly impact financial outcomes such as yield and equity returns.