Real Estate Evaluation

Running head: REAL ESTATE EVALAUTION
Real Estate Evaluation
Name of the Student:
Name of the University:
Author’s Note:

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Serial Particulars Yes No
1 Cost Involved in the Development of the Project Yes -
2 Report for the City Highrise Project Yes -
3 Earnings/Cash Flows Schedule Yes -
4 Profit Analysis Yes -
5 Development Expenses Yes -
6 Financing Expenses Yes -
7 Increase in Outflow or Expenses of the project Yes -
8 Return Generated by the project Yes -
9 Revenue Forecasting for the John Wiley Pty Ltd Yes -
10 Acquisition Price for John Wiley Pty Ltd. Yes -
11 Financial Analysis for John Wiley Pty Ltd Yes -
12 Return Creation Yes -
13 Exit Route for City Highrise Yes -
14 Impact of Leverage Yes -
15 Risk Assessment Yes -
16 Sensitivity Analysis Yes -
Assignment Checklist

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Table of Contents
Letter of Advice...............................................................................................................................3
Executive Summary.........................................................................................................................5
Introduction......................................................................................................................................6
Assumptions....................................................................................................................................6
Methodology....................................................................................................................................7
Spreadsheet and Evaluation of the Factors Evaluated.....................................................................8
Discussion and Recommendations................................................................................................13
Risks and Sensitivity Analysis................................................................................................13
Risk Evaluation of City Highrise project..............................................................................13
Exit Route Evaluation.............................................................................................................15
Annual Cash Flow for John Wiley Pty Ltd...........................................................................16
Analysis of the Project under Scenario 2 for John Wiley Pty Ltd......................................18
Return from Project under Scenario 2..................................................................................19
Conclusion.....................................................................................................................................19
Reference.......................................................................................................................................20

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Letter of Advice
Melbourne, VIC 3000
Telephone [phone]
www.mckenzieandassociate.com.au
28th September 2018
Mr Con Gomes,
The Managing Director
City Highrise Complex Development Option.
Level 6, 510 King William Street,
Adelaide SA 5000
Dear Mr. Gomes,
Sir it is to bring under your notice that the Financial evaluation for the Project City high rise was
evaluated where the cost and the revenue analysis was done for the project. Total development
cost was even determined for the project which gave us the estimate for the total cost that will be
incurred in the project due course of time. The financial evaluation and analysis done was based

4REAL ESTATE EVALUATION
on assumptions and facts that the company may face at the time for the construction of the
project.
The different components and factors were evaluated on the base that the factors for
estimating the project revenue and expenses such as the construction expenses, development
expenses and the escalation and outgoing costs could have probable impacts on the project.
Present breakdowns and scenario project Investment Analysis was done on different
grounds and different scenarios where the project scenario could be determined under the
optimistic and pessimistic scenario. Scenario Analysis and the risk assessment and analysis
helped us gain an scenario under which the project could land up. The exit rout and the price for
selling the developed project to John Willey Pty Ltd Company and the developers profit arising
from the same were the key factors evaluated and included in the project.
Please feel free to get in touch with us in case of any concern or query.
Yours Sincerely
Financial Adviser
Real Estate Developer

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Executive Summary
The aim for the project is to evaluate a Real Estate project that is the City Highrise project. The
analysis and the evaluation of the project was done on the basis of the cost and the revenue
implied by the project. The City Highrise project has been divided into different scenarios where
the project commences with the demolition of the existing building and the construction and the
planning and the development of the new project. The approaches used for the valuation of the
project was the income and the cost approach for the City Highrise Project. The development
cost breakdown along with the cash expenditure involved for constructing the complex was
carefully analyzed. The risk assessment for the project was done by using the risk assessment
tools such as the scenario analysis, which gave us an optimistic and pessimistic scenario for
conducting and the final evaluation of the project.