Project Type · Redevelopment
Redevelopment Feasibility
Redevelopment trades a known income stream for a larger, uncertain one. We measure the hurdle the existing property sets, then test whether redevelopment clears it.
Scope
What this analysis is for
Redevelopment differs from new development in one decisive way: the site already has a value in its current use. Any redevelopment scenario must produce value above that existing value plus the cost of demolition or renovation, entitlement, construction and the income forgone during the transition.
Wert-Berater analyzes redevelopment through highest and best use: what uses are legally permissible, physically possible, financially feasible and maximally productive, tested against market evidence and against continuing the current use.
Analytical framework
Redevelopment analysis
- 01
Existing property and current value
Current use, income and value: the hurdle redevelopment must clear.
- 02
Highest and best use
Permissible, possible, feasible and maximally productive uses.
- 03
Market demand and alternative uses
Demand for each alternative and its competitive context.
- 04
Demolition or renovation
Whether to clear, partially retain or renovate.
- 05
Entitlement and construction
Approval path, timing and construction cost.
- 06
Costs, revenue and NOI
Total project cost and stabilized operations for the selected scenario.
- 07
Value creation and returns
Value created above current value plus cost and income forgone.
- 08
Risk
Entitlement, cost, market and timing risk by scenario.
- 09
Monitoring
Redevelopment progress and stabilized performance.
Evidence
The redevelopment hurdle
Each line is tested against independent market and operating evidence, not accepted from the sponsor or seller model.
| Variable | What we test |
|---|---|
| Current value | What the property is worth continuing in its current use. |
| Income forgone | Cash flow lost during entitlement and construction. |
| Project cost | Demolition, entitlement, construction and carry. |
| Stabilized value | Value of the redeveloped asset at stabilization. |
| Value creation | Stabilized value less current value, project cost and income forgone. |
Application
Who engages redevelopment analysis
Owners of aging assets
Continue, renovate, redevelop or sell.
Institutions with land
Endowments and foundations evaluating campus or legacy property.
REITs and funds
Redevelopment of underperforming portfolio assets.
Public and economic development organizations
Redevelopment of strategic sites.
Work product
What you receive
- Highest and best use analysis
- Redevelopment scenario comparison
- Feasibility study for the selected scenario
- Value creation and risk analysis
Scope boundary. Highest and best use analysis in this context is a feasibility analysis, not an appraisal opinion of value.
Analytical continuity
After the Investment: Independent Performance Monitoring
Redevelopment projects pass through entitlement, construction and lease-up before value is realized. Monitoring keeps each phase measured against the scenario that justified it.
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.