Acquisition Model vs. Asset Management Model
I've been tasked with building an AM model for a mixed-use deal we're about to close on (70% resi / 30% commercial). The acquisition model used for this deal has run its course and the model's structure will make it a nightmare to build in AM capabilities.
All prior models I've built have been acquisition models but I understand, to a certain extent, the difference between the two:
- AM model is significantly more detailed: hard / soft costs broken down by line item and then modelled in more detailed (e.g S-curve, flat line) - also applies to income line items
- Being able to show any variance between the acquisition underwrite and actual costs / revenues for reporting purposes
- Reforecasting abilities should event XYZ take place (e.g. construction delays)
- Capital Events (capital contributions/calls, distributions, hold/sell/refi analysis)
In terms of setting up the structure of the model, what should I be keeping in mind? Any obvious elements that should be included? Any examples?
Any guidance on how to deal with capital events would be greatly appreciated.
Curious to hear your thoughts/experience.
EDIT: Thanks to all who've replied. At this stage I'm putting together an outline of the model - taking into account the feedback below - and will present to my principals.