ABSTRACT
A thorough understanding of the financial proforma for a real development project requires a solid foundation in real estate finance—the hard science of spreadsheets and the soft science of the key financial metrics by which lenders and equity partners evaluate projects competing for financing. Most real estate developers understand how to set up the mathematical analysis of a real estate project and which variables can “move the needle” so that an infeasible project becomes feasible. However, changing variables in a proforma is not magic if you are merely manipulating the numbers that ultimately cannot be attained in development, construction or operation of the project.
