Financial analysis supporting surplus and legacy real estate asset management is the cornerstone of our advisory services. Using RESIGHT’s financial model REALM™, we work with our clients to internally analyze and vet the cost of property reuse and liability divestiture, providing a sound financial basis to support management decisions in selecting a preferred disposition strategy.
REALM™ is a discounted cash flow model for estimating cost of ownership, cash flow requirements and net transaction value for each disposition or reuse option under consideration. REALM™ utilizes the timing of projected cash inflows (revenues) and outflows (expenses) to calculate the net present value (NPV) of a given disposition strategy. RESIGHT develops a “Base Case,” against which alternative reuse strategies are then compared to determine the optimal strategy, lowest NPV lifecycle cost and the probability that a given strategy may be successfully implemented.
REALM™ incorporates important financial inputs such as discount rate (opportunity cost), corporate tax rate, tax treatment of costs (capitalized versus expensed), asset depreciation and carrying costs. The result is a dynamic evergreen decision tool that allows for continual management updates over time to inform future as well as current decisions.
REALM™ model outputs for disposition options under consideration include:
[list-ul type=”arrow”][li-row]Discounted (NPV) and undiscounted net transaction cost (net cost to restructure)[/li-row]
[li-row]Pre-and post-tax net transaction cost[/li-row]
[li-row]NPV cash flow[/li-row]
[li-row]Maximum required cash and cash required at transaction close[/li-row]
[li-row]Tax impact analysis[/li-row]
[li-row]Cost avoidance analysis[/li-row]
[li-row]Documentation of the most critical cost elements to focus transactional activities
REALM™ also supports development and analysis of municipal bond and tax incremental finance models in support of public and private redevelopment projects.