Project Type · New Development
New Development Feasibility
Ground-up development carries the longest distance between assumption and result. We test the concept from site through stabilization, then stay with the project as it is built and leased.
Scope
What this analysis is for
A development pro forma describes a building that does not exist, in a market two or three years from now. Feasibility analysis asks whether that future is supported by present evidence: the demand drivers, the competitive pipeline, the realistic cost of construction and the time required to fill the building.
Wert-Berater has prepared development feasibility for lenders, agencies and sponsors since 1998. Our studies are built to be read by credit officers and investment committees, with market evidence connected directly to the financial model.
Analytical framework
Development lifecycle
- 01
Concept
Use, scale and positioning tested against market gaps.
- 02
Site selection
Location, access, visibility and competitive context.
- 03
Pre-development
Budget, schedule and capital stack assembled for testing.
- 04
Entitlement
Approval risk and its effect on timing and carry.
- 05
Construction
Cost, contingency and schedule against comparable projects.
- 06
Lease-up / ramp-up
Absorption pace and concessions to reach stabilized occupancy.
- 07
Stabilization
Stabilized NOI, value and permanent debt capacity.
- 08
Monitoring
Construction, lease-up and post-stabilization performance against the study.
Evidence
What we analyze
Each line is tested against independent market and operating evidence, not accepted from the sponsor or seller model.
| Variable | What we test |
|---|---|
| Market, demand and supply | Net demand after accounting for the competitive pipeline delivering during construction. |
| Competition | Positioning and pricing against existing and planned competitors. |
| Development cost | Hard, soft, financing and contingency costs against comparables. |
| Revenue and operating expenses | Stabilized revenue and expense ratios for the asset type and market. |
| NOI and capital requirements | Stabilized NOI against total capitalization including carry and reserves. |
| Debt, equity and DSCR | Debt sizing, equity requirement and coverage through lease-up. |
| IRR and value | Returns and stabilized value under base and downside cases. |
| Sensitivity | Effect of delay, cost overrun and slower absorption on returns and coverage. |
Application
Investor and lender perspectives
Equity investors
Is the return adequate for development risk relative to acquiring stabilized product?
Construction lenders
Will the project reach a takeout-ready NOI before reserves are exhausted?
Developers
Does the concept justify committing to land and entitlement costs?
Agencies and programs
Does the project meet program feasibility requirements?
Work product
What you receive
- Market and financial feasibility study
- Integrated development and operating model
- Absorption and stabilization schedule
- Sensitivity analysis on cost, timing and rent
Scope boundary. Feasibility conclusions are independent and are not contingent on the project proceeding. A feasibility study supports review; it does not guarantee financing or approval.
Analytical continuity
After the Investment: Independent Performance Monitoring
Development is where monitoring adds the most: construction budget, schedule and draws, then lease-up pace and stabilized NOI, each measured against the feasibility study that justified the project.
The analytical relationship does not have to end when the feasibility study is delivered. Wert-Berater can continue monitoring the asset against the original underwriting assumptions, updating market conditions, testing coverage, identifying performance variances and maintaining a recurring analytical record.
-
Individual Asset Monitoring
- Revenue
- Expenses
- NOI
- DSCR
- Occupancy
- Market rents
- Competitive supply
- Value
- Original underwriting assumptions
-
Watchlist Monitoring
- DSCR deterioration
- NOI deterioration
- Occupancy
- Revenue
- Expenses
- Market conditions
- Collateral / value
- Stabilization
- Refinancing risk
-
Construction Monitoring
Most relevant here- Progress
- Budget
- Cost-to-complete
- Schedule
- Change orders
- Draws
- Remaining costs
- Lease-up
- Stabilization
-
Portfolio Monitoring
- Portfolio performance
- Risk
- Concentration
- Market exposure
- Annual review
- Re-underwriting
- Watchlist
- Portfolio-level trends
Related analysis
Continue through the lifecycle
Discuss the analysis before you commit to it.
A briefing is a working conversation about the decision, the evidence available and the scope that would answer it. There is no obligation, and nothing is subscribed.