Summary
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.
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.
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.
Dynamic Calculations: The recalculation process is separated from the โsave and refreshโ function due to the extensive backend processing required.
Insights Based on Numbers
Target Metrics: The target development margin of 20% and IRR of 10% provide a benchmark to evaluate profitability across various scenarios.
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.