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David Gottein Martinez
Learn how to build an Office Real Estate Financial Model from scratch based on a real Case Study.
Updated on Sep, 2026
Finance and Accounting, Financial Modeling and Analysis,
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This course is based on the following Case Study:
As an investor at Udemy Capital specializing in office building developments, you are planning to purchase a land plot to develop a modern, build-to-suit office building for a major tenant who is willing to sign a 10-year lease (with no break options) for their headquarters. As part of Udemy Capital’s underwriting process, you need to model the following assumptions on a monthly cash flow basis. If you think that some of these assumptions may not make sense or could be more accurate, feel free to change them as long as you justify them properly.
Land & Acquisition Costs
Purchase of the Land on 01 January 2025.
Land Purchase Price: to be determined by a minimum Levered IRR (LIRR) of 15% and an Equity Multiple (EM) of at least 1.80x.
Buildability: 10,000 sqm.
Real Estate Transfer Tax: 10% over Land Purchase Price.
Notary & Registry: 0.25% over Land Purchase Price.
Buy-Side Brokerage Fee: 1.50% over Land Purchase Price.
Due Diligence: 75,000€.
Project: 10,000 sqm.
Construction Period: 18 months starting in Month 1.
Hard Costs: 1,800 €/sqm.
Soft Costs: 15% over Hard Costs.
Contingency: 5% over Hard + Soft Costs.
Leasing Costs: 1 month of Rent.
Tenant Improvements: 23.50 €/sqm to be paid out for 2 months, starting the first month of rent
Gross Leasable Area (GLA): 10,000 sqm
Yearly Rental Bump: 2.50% on each lease anniversary
Free Rent: 5 months of rent
Operating Expenses (Opex): 15% over Gross Rental Income
Non-Recoverable Expenses: 10% of Opex
Building Capex Maintenance: 5% over Gross Rental Income
Holding Period: 5 years
Exit Cap Rate: 4.25%
Selling Costs: 1.50% over Sales Proceeds
None, land will be acquired with Equity
Loan to Cost (LTC): 60%
Arrangement Fee: 1.00% over Loan Proceeds
Equity First Structure
All-in interest rate: 5.50%
Repayment: bullet at Refinance
Refinance Month: at stabilization after TIs and Free Rent Periods
LTV: 55% of value at refinance
Cap Rate at Refinance: 4.75%
All-in interest rate: 4.50%
Amortization: French amortization schedule
In order for your Investment Committee to consider this deal you will need to show:
Annual Cash Flow Tab
- Rent and Hard Cost
- Land Purchase Price and Exit Cap Rate
For all levels. However, basic Real Estate knowledge is recommended.
Who is this course for?
Check out the detailed breakdown of what’s inside the course
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