How does one underwrite a downside contingency in a PERE deal? Would you just include a contingency line below NOI taking x% of NOI or are there other ways to incorporate this?
| +35 | Q&A | Founder, ten31 Media, The Promote | (10+ years in CRE Media) | 10 | 1d |
| +29 | The Punch Mayweather Didn't See | 13 | 2d |
| +6 | Acquisitions Experience Needed? | 1 | 2d |
| +4 | Hudson Advisors Superday | 2 | 21h |
| +3 | Nuveen Associate Case Study | 1 | 1d |
| +3 | Land Development Discussion | 1 | 3d |
| +1 | Blackstone RE AM? | 3 | 9m |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Lol funny
Capitalize it into your project costs. Take a % of total project cost or Y1 NOI if that’s what you’re referring to.
Agree with cpgame I feel like the contingency should be baked into the respective line items (above NOI) that you are referring to when those costs materialize in your budget assuming this is a development deal and using DCF.
hard cost, soft cost and land cost contingency in a construction budget has 0 effect on NOI.
Voluptates natus qui laudantium fugiat omnis similique. Et ab suscipit quo quo eaque ut temporibus. Sequi qui ut ab delectus consequatur vero. Consequatur et id molestiae earum.
Repudiandae esse tempore non quis ab. Facere voluptatem quasi qui sint. Dolores libero non facere sint quo.
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...