The Pro Forma

Hayward Area Planning Association has no financial stake in the College Heights Project.

The pro forma assumes a 20% of investment from equity, a 50% internal rate of return (IRR Excel function) over seven years, 7% interest, 732 units, and a medium rate of absorption of 15.25 units sold per month over 48 sale months. Total revenue is about $533 million.

The pro forma is the financial analysis of the project. The tabs of the spreadsheet are:

  • Inputs
  • Summary
  • Cash Flow
  • Revenues
  • Options
  • HOA Assets
  • Buildings
  • Building fees
  • Building team
  • Floor Plans
  • Close out
  • Phasing
  • Phased Site Improvements
  • Cut/fill, Podium
  • Major Site Improvements
  • Site Improvement fees
  • Site Improvement team
  • Land
  • Entitlement

A project pro forma is frequently used to test assumptions and to keep up with the best available information on prices. The purchase price for market housing is usually based on comparables. For this project, however, there are no comparables, so the price was set on achieving an internal rate of return of 54.7%.

The pro forma for monthly HOA dues uses a spreadsheet required by the California Department of Real Estate. It includes income from parking leases that pay for the podium and income from short-term parking charges. There may be income from the café, store, and meeting room. This income reduces the dues and offsets the increase in expenses by building the parking podium. Dues are higher by about $100 per month because of the cost of the Transportation Demand Management (TDM). Dues to the HOA will run from $156 to $204 per month. The HOA pro forma is being updated.