This is kind of embarrassing because I'm a borderline Excel expert and have a ton of experience modeling real estate deals, but I've finally come to a deal where I have to have my capitalized interest be flexible and I am totally blanking out on how this is dealt with. Do you require VBA/macros to make this flexible? Or is there a hack in Excel? I thought I knew how to do this and now I'm just blanking out.
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I'm happy to try and help you but need a little bit of clarification - when you say capitalized interest being flexible, do you mean you need it to be dynamic as to the balance accrual upfront, or flexible with the duration/carried balance being able to be rolled forward?
Gracias.
Dynamic as to the balance accrual upfront. For example, cost of construction goes up, cost of capitalized interest goes up; LTC goes down, cost of capitalized interest goes down.
Got it - in that case, don't think you would need VBA. Think all you have to do is create a couple of rows toward the bottom of the cash flow or the very bottom of the sheet that works sort of like the gross capital basis/ending capital balance that's based on an if-statement which adds/subtracts from the balance after each year.
So, you could have a couple of added input fields for how many years/months the capitalized interest is carried and how the balance is calculated, then use that as the criteria for whether or not that balance is included in a given year's balance, and have a negative entry come through in the month/year immediately following when that interest value is wiped off the balance. This would be similar to how AE calculates the cash on cash/NOI to book and how you'd set up an asset management fee on the capital account.
Ahhhhh yes, that jogged my memory. That makes sense. Thank you much!
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