When do project costs and sale proceeds occur?
Acquisition and construction create negative unlevered cash flows. Presales and condominium closings determine when positive cash flows become available.
One project, two linked schedules
The project pro forma determines when funds are needed. The construction-loan account determines how those needs are financed.
How much of the facility remains for project costs?
Cash advances and accrued interest share one commitment. Interest can increase the loan account even when no new construction work is funded.
Cash advances outstanding + accrued interest = total loan balance ≤ construction-loan facility
Interactive condominium development model
The default assumptions reproduce the structure of Figures PIII.13 and PIII.14. Move one assumption and every linked schedule updates.
Selected: Course case
Project and construction assumptions
Construction financing assumptions
Transaction and condominium-sale assumptions
Project cost before financing—Acquisition, transaction, and construction costs
Total construction interest—Capitalized or paid from project cash and equity
Peak loan balance——
Total equity contributed——
Net sale proceeds—Gross condominium sales less sales costs
Equity profit after financing——
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Construction spending and the S-curve
Per-period spending follows a concentrated construction schedule. Cumulative spending converts that distribution into an S-shaped path.
Construction spending by quarterCurrent: course quarterly schedule
Course-case baseline
Active case
The gray baseline remains fixed. Duration, peak timing, spread, budget, and cost overruns change the navy active-case series.
Cumulative construction spendingShare of selected construction budget
Course-case baseline
Active case
A steeper middle section means that a larger share of the budget is spent over a shorter interval. Sales-only assumptions do not change either construction curve.
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Construction-loan account
The total loan balance combines cash advances and accrued interest. The second panel isolates the accrued-interest balance that compounds inside the facility.
Total construction-loan balanceEnd-of-quarter balance
Course-case baseline
Active case
Active-case facility limit
The vertical distance below the facility limit is remaining loan capacity. Select an active-case point to inspect that period.
Accrued interest inside the loan accountNegative amortization component
Course-case baseline
Active case
This panel magnifies the interest component that was difficult to distinguish inside the former stacked balance bars.
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AcquisitionFinal closing
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Active-case selected-period loan and equity bridgeTime 0
Beginning total loan balance—
Cash advance for project costs—
Accrued interest added to facility—
Loan repayment—
Ending total loan balance—
Remaining loan capacity—
Equity contributed in period—
Cash distributed to equity—
Quarterly project and financing schedule
The table joins the unlevered project cash flows from Figure PIII.13 with the financing schedule from Figure PIII.14.
| Period | Project costs | Net sales cash | Unlevered cash flow | Cash advance | Interest expense | Loan repayment | Ending loan balance | Equity contribution | Cash to equity |
|---|
Project costs are shown as positive uses in this schedule. Cash-flow rows in a conventional pro forma would display those uses as negative amounts.
What students should notice
The timing of otherwise identical project costs changes financing needs and the developer’s equity outcome.
Interest uses loan capacity
When the facility includes an interest reserve, every dollar of accrued interest leaves one less dollar available for acquisition or construction costs.
Timing changes financing cost
Earlier spending creates a larger balance sooner. A longer period before closing allows interest to accrue for more quarters.
Sales follow a repayment waterfall
Net closing proceeds first cover interest and the outstanding loan account. Equity receives only the remaining cash.
Course-case source: FIN 355 prerequisite workbook, Figures PIII.13 and PIII.14. The construction-spending visualization extends the S-curve concept in Chapter 10, Figure 10.3. This tool makes the inclusive-facility interpretation explicit: interest is estimated quarterly using the average total loan balance and compounds while it remains in the account. Presale deposits remain in escrow unless the release option is selected.
Instructional-use notice. This simplified model omits taxes, lender fees, retainage, guarantees, default interest, detailed draw procedures, and many transaction-specific provisions. It is intended for teaching only, not for financial, legal, tax, appraisal, lending, or investment advice.