![]() Pro-Forma – Office/Retail Property (XL). ![]() The Real Estate Pro-Forma Excel and Guideīelow, we’ll walk through a pro-forma for an office/retail property with 3 tenants on different lease types (Full Service, Single Net, and Triple Net): It’s just that for financial modeling, valuation, and investment analysis, you almost always skip the full statements and focus on the pro-forma instead. To be clear: properties still have full financial statements. It’s also simpler because Working Capital tends to be less important for properties, and you effectively use Cash Accounting rather than Accrual Accounting in the analysis.Īlso, you usually ignore income taxes because properties tend to be owned by pass-through entities such as Partnerships, S Corporations, and REITs that do not pay corporate income taxes.įinally, “other activities” on companies’ Cash Flow Statements are often minimal for properties, and Debt and Equity Issuances and Debt Service can be handled directly on the pro-forma. Properties are much simpler than large companies, so if it’s feasible to simplify the financial statements like this for companies, it’s even more feasible to simplify them for properties. You don’t need a Balance Sheet because you can track Cash, Debt, and Equity separately below these projections, and you can estimate the Change in Working Capital with a simple percentage.Īnd you don’t need a full Cash Flow Statement because many of the items on it are non-recurring and, therefore, do not factor into the projections. ![]()
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