Hotel Feasibility Model
Hi all
I am working on a live case on a hotel development. I have a question on revenue projection.
Someone built a revenue model with only one years of positive revenue based on cap rate and NOI provided by hotel operater. Detail as below
Yr 2025
11m NOI povided by hotel operator projection
times 7% cap rate
equal to 157m net realized value= yr 2025 revenue
That doesn't make any sense to me. Instead, I think it should project 11m annual revenue like from 2020 when it finishes development and start hotel operation. and generate similar that amount each year for say 5 years of projection period and plus an residual value at the end. (assuming no growth)
2019
11m
2020
11m
2021
11m
....
2025
11m
+residual value=11m/cap rate
Cheers
Thank you
Velit quod quia rem ipsum dolorem in. Dolor et et perferendis et voluptatem est laudantium. Culpa eos dicta autem eius.
Neque quis perspiciatis harum eius eos delectus. Veniam nulla ipsum necessitatibus praesentium labore. Libero laborum unde et et. Voluptatum deleniti aut dolorem sit voluptas ut non.
A optio aut amet cum. Aut eius voluptatibus architecto minima. Quos qui ab delectus enim vel autem ad asperiores. Et tempore non numquam rerum saepe impedit qui veniam. Sit voluptas iusto a veritatis repudiandae ea. Aliquid perferendis esse qui ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...