Shopping Center Acquisition – 10 Year Financial Model (Excel XLSX)

A shopping center acquisition involves purchasing a retail property that houses multiple tenant stores, ranging from small shops to anchor stores. Investors assess the property's location, tenant mix, lease agreements, foot traffic, and financial performance before purchase. The goal is to generate rental income from tenant leases and benefit from property value appreciation. Effective management, maintaining high occupancy, and adapting to retail trends are key to maximizing returns from a shopping center acquisition.

This Financial model presents an investment scenario of a Shopping Center, from the acquisition of the property to a potential future sale. The model contains the basic elements required to determine a range of possible IRR returns to an investor, given a high-level set of assumptions about the asset's operating forecasts, leverage, and exit price.

Model Structure

•  General Setup & Acquisition Inputs
Operating and Acquisition-related inputs, including Project Timing, Acquisition, Renovation and Property Sale Assumptions, Center Metrics (Land Size, Stores & Offices Area, Parking Area, Outside Area, Visitors, Store Types, and Occupancy Rates), Revenue (Rental Revenue, Turnover Revenue, Ancillary Revenue), Operating Expenses, Capital Expenditures and Financing through Equity and 2 Loan types.

•  Scenarios
Scenario Analysis using different approaches of calculating forecasted figures, usually calculating 3 scenarios; a base, an upside and a downside scenario.

•  Debt Schedules
Amortization Schedules for the 2 types of loans provided in the model (Acquisition and Permanent Loan)

•  Monthly Cash Flow
Monthly CF presents all the operating cash flows of the property over monthly periods.
It allows users to control the timing and how the cash flows over that time.

•  Annual Cash Flow
A roll-up of the monthly cash flows into annual periods from property acquisition to disposition. It includes also calculation of Stabilized Yield on Equity and Cost, Debt Service Reserves and Property Sale Taxes

•  Performance Reports
The model includes Break-even Analysis, KPIs and Perfomance dashboard reports assisting users to monitor hotel's operations and profitability.

•  Project Returns
Report presenting project unlevered and levered returns (Pre-Tax & After-Tax IRR, MOIC, Cash Outflows, Inflows and Profits)

•  Investors' Returns Waterfall
A 4-tier IRR hurdle waterfall model to distribute proceeds between investors. The model allows for up to four tiers (IRR hurdles) and assumes only one sponsor (i.e., GP) and one LP. The first tier distributes cash flow to the partners until the LP has achieved some defined preferred return and received a full return of capital. Assuming the preferred return hurdle is hit in tier one, cash flow is distributed in tiers two through four based on a defined promote structure and hurdle rates as outlined by the user.

•  Acquisition Summary:

A high-level summary of the project key info, including:

•  Key Project Metrics (Total Storage Units, Net Rentable Area Ratio, Acquisition and Exit Yield, Stabilzed Yield on Equity and Cost)
•  Uses & Sources of Cash
•  Operations Summary (Gross Revenue, Net Operating Income, Net Cash Flow)
•  Property Sale and Project Level Return Metrics (Unlevered & Levered)
•  Partnership Level Return Summary (LP's & GP's)
•  Dashboard

Detailed instructions for the use of the model are included in the Excel file.

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