Final Project Assignment
The final project proposal (“Final Project”) for The Development Process course consists of a full analysis of a potential development project, to be worked on throughout the semester. The basis of knowledge and skills to complete the analysis and the Final Project will be contained in assigned readings as well as class lectures and guest speakers. However, students will need to do independent research on additional topics that are relevant to the project, such as specific local market research including construction cost, rental rates and financing assumptions.
Each individual will follow typical tasks associated with the development of a project, and take on the role of the various players in a development project including the architect/site planner, the financial analysis, the developer, and the broker/market researcher.
You will be given a choice of two different sites to choose from: 450 Hudson Boulevard, NY, NY or 1301 Beaver Ave.Pittsburgh, PA. Throughout the semester, you will havethree assignments to show your progress, as well as the Final Project which will be due at the end of the semester:
1. Project Selection & Site Analysis: Each individual will submit no more than three pages describing the analysis that they performed in order to select the project they are choosing to focus on. This paper should discuss the site’s location (with map references), neighborhood (with maps), physical attributes, zoning and approval process, if applicable, transportation, access to/from the site, and may include a back-of-the-envelope calculation.
2. Market Analysis:(No more than 5 pages) A thorough analysis of the market should include the collection of both supply and demand data, to conduct a market study. In addition, a marketability study should be also analyzed to determine the product type that will be successful in your development. This analysis should include site location, maps, and target market area with maps, and competition analysis. Market data above and beyond what has been provided must be researched – use NYU’s library sources.
3. Draft Financial Model: A draft of the model should be submitted and reviewed with the Professor to go address any questions, and assure proper sources of data. Any questions related to the Financial model should be asked during this meeting. No second revisions of drafts will be reviewed in advance of the final submission.
Your Final Project, will consist of three parts: (i) a written proposal, (ii) a financial analysis, and (iii) a final presentation.
1. Written Final Project Proposal: Students will submit a written report, with a minimum of the components listed below, and should not exceed 25 pages includingappendixes. The Written Final Project Proposal should be viewed as a development proposal that will be presented to an investment committee. Therefore, it should be convincing in nature, and seek to get approval from savvy investors who will want to evaluate the project based on a lucrative financial return, confidence in market fundamentals, and faith in the project team to execute the project proposal.One hard color copies as well as electronic versions of the Final Project Proposal should be submitted. The written proposal should consist at a minimum of the following components:
• Executive Summary
• Site selection, acquisition and analysis (A draft of thispart will be submitted; Please revised this section as per Professor comments; you do not need to include your Back-of-the-envelope, as you have refined your numbers at this final stage)
o Zoning/Approval Process (if applicable)
o Location and Area Maps/Photographs of existing site and neighborhood
• Market Analysis(A draft of thispart will be submitted; be sure to revise this section as per Professor comments; be sure to conclude your market analysis by justifying your assumptions for the Final Project)
• General Site Plan& Program Description
o This does not need to be an autocad drawing, just a general picture showing where on the site your project will be located, and what the square footage breakdown will be by use,
• Cash Flow analysis/Financing Proposal(A draft of thispart will be submitted)The following 3, at least should be included, either in an appendix or within the body of your submitted Paper
o Development Budget (Include PSF numbers)
o Capital Structure (Show equity, debt and any other sources of financing)
o Development and Operating Pro Forma
• Leasing and Marketing Plan (Analysis of Tenant industry, or a specific company, if applicable)
• Exit Strategy (Sale, hold, refinance, year)
Note: Any chart of visual that is not sourced, will be assumed to be the student’s original work. If it is not your original work, please site the source (even if it is google images).
2. Financial Analysis: A full cash flow analysis should be done of the proposed project. This will include a development budget, operating pro forma, details on capital structure, as well as an exit strategy. All assumptions made in the analysis should be sourced and explained (i.e. construction costs, operating assumptions, leasing assumptions, financing assumptions). In addition, the accompanying excel file of the financial analysis should be submitted in electronic format.
2. Final Project Presentation: Each individual will give a 5-minute presentation to a “City Council” seeking project approval. The Final Project Presentation should be viewed as a development proposal that will be seeking approval from public officials and the community. This presentation should seek to convince the public of the benefits of the project, as well as addressing any questions or objections that the public officials or the community may have. The presentation will consist of 5-minutes of presenting and 5-minutes of Q&A.
Grading:
Your grade will be based upon identifying the relevant, key development process concepts and your critical thinking, presentation of facts and arguments, foreseeing any potential road blocks for development and mitigating them before they are addressed. The written paper will also be graded on organization, cohesiveness, and writing quality, and should be thoroughly reviewed for grammar and spelling (USE SPELL CHECK and PROOFREAD!). The presentation will be graded on a) content of presentation, b) visual presentation and c) delivery of presentation.
The written report is due on the second to last class and MUST BE SUBMITTED in HARD COPY (double-sided color) andthe final classpresentation materials are due at the beginning of the last class (electronic copy). During the last class, students will make their 5 minute presentation.
Please upload all assignments to NYU Classes.
Any files emailed to Professor should be labeled in the following format: LAST NAME_FIRST NAME_TITLE (i.e. Packard_Corinne_Market Analysis). Also please remind me what class section you are in in the email.
Further Guidance:
Your Final Project Proposal should also answer the following questions:
1. Why did you choose this site? What was the cost to acquire the site? What market analysis was done to justify this cost?
2. Were additional entitlements required for the site to be development ready? If so, what public approvals were required?
3. What is the best use for the property? How do you plan on developing the property? How did you determine the demand for this use?
4. Given your planned use for the property, who conceptually would occupy the property once you complete your development? How did you establish this demand existed and what the pricing for the users would be?
5. Financing the project (Sources all assumptions):
a. Create a development budget for the project
b. Create a10-year operating pro forma for your project (showing how the project meets your hurdle rates), or another term if justified
c. Use financial measures to highlight the attractiveness of your project to investors (ie IRR, condo sales margin)
6. What would the capital structure or financing for this project be (source assumptions):
a. For construction and site acquisition?
b. After project opening?
7. What specific factors or justification could be enumerated as benefits for the community and City should this project proceed as proposed?
8. What objections do you expect to face from the community and City authorities? How will you assuage those objections?
9. How will you market the project and to whom?
10. What is (are) your exit plan(s) at each development stage of your planned project?
plan(s) at each development stage of your planned project?
