Analytics and Underwriting

Many real estate developers, sponsors and investors do not have an interest in hiring, nor the need for, a full-time staff of qualified finance professionals to manage market, economic and due diligence and provide investment evaluation and the management of technical analyses and underwriting.

Redpoint is able to fill this role.

With its vast knowledge of financial engineering, Redpoint, not only performs a wide range of technical analyses in the ordinary course of its engagements but also makes available value-added solutions for meeting feasibility evaluation on a multi-project, single project, or task-specific basis.

Redpoint's “consulting” services include the following:

Feasibility Assessment
Redpoint applies its extensive accounting, financial and economic skill sets to perform detailed evaluations of the investment return of a proposed or existing real estate development or acquisition. These analyses are typically used by our clients to identify the most profitable and competitive options among the range of alternatives contemplated. Redpoint carefully considers operating costs, market constraints and supply/demand generators that are expected to influence an asset's future performance. We work closely with engineers, land planners and other technicians to assess development opportunities and associated impacts on project construction and operation costs. In addition, the firm thoroughly assesses and justifies its assumptions on investment return targets (i.e., discount rates) given a client’s risk profile. Redpoint often applies statistical methods to evaluate the magnitude and direction of historical variability in key metrics to accurately frame the risk to potential returns and performance.

Financial Modeling and Deal Structuring
Redpoint offers its client’s a wide range of MS Excel-based financial and economic modeling. These macro-based, menu-driven models are developed to be highly flexible and user friendly. They are designed on a project-specific basis to provide developer/sponsors and their investors with a ready-made tool that can be used to evaluate an investments implications or alternative assumptions quickly and accurately on a project’s parameters and distribution waterfalls. The models are structured to be easily updated as evolving project dynamics necessitate. They typically provide the ability to sensitivity test assumptions on development timing, scale, cost, revenues, investment return requirements and capital structures (both debt and equity), among other variables. The models are linked to statistical assessments of historical levels and trends in key variables such as costs, interest rates and pipeline to bound sensitivity assessments to actual market dynamics. While “past performance is no guarantee of future results” it is instructive on the expected order and magnitude of future variability in outcomes. These models may be used for a range of purposes including efforts to raise capital, support applications for public financing and incentives, and understand the outcomes to manage risk.

Market Evaluation
Redpoint provides detailed assessments of opportunities and constraints associated with the markets in which the firm's clients seek to develop and/or acquire commercial real estate assets. On the demand side, these efforts focus on modeling historical patterns of utilization, demand driver identification and characterization, capture rate analyses, population and demographic assessments, regional economic condition and trend and elasticity measurements. On the supply side, these efforts focus on historical pricing patterns, competitive supply inventory and positioning assessments, actual and potential development pipeline surveys, and regulatory evaluations. As warranted, the firm draws from a wide range of third-party data sources in support of market evaluation and actively reaches out to other participants in the marketplace, including real estate investors and managers, to better understand prevailing and anticipated future demand and supply dynamics.

Public Outreach and Incentives
Redpoint provides its clients with analyses in support of their efforts to secure public tax and other incentives in support of their real estate development endeavors working closely with public sector representatives to explore, analyze and negotiate terms. Redpoint also plays an active role in preparing and providing associated public presentations. Today’s real estate development and ownership landscape is challenged by high costs, complex and inflexible public bureaucracies, and ever-changing competitive pressures. Accordingly, to be successful, real estate developers and owners must effectively sell to local stakeholders the community value of their vision and actively explore all financial and economic support/subsidies available from public sources. The former includes demonstrations of the positive local fiscal and economic benefits/impacts of proposed real estate investments and development. The latter includes taking advantage of opportunities to obtain transient occupancy and sales tax relief, access to public debt, tax increment financing (TIF), PACE financing, direct public grants and subsidies, etc.

Fiscal Impact Analysis
Redpoint provides the firm's clients with a broad array of fiscal impact analyses in support of their real estate entitlement, development, and redevelopment activities. Very often local community and public stakeholders are keenly focused on the implications of a proposed real estate project on the area's public financial situation. Accordingly, the firm prepares analyses and reports summarizing the overall tax and fee benefits of project and business development. These analyses may include consideration of property tax, sales tax, transient occupancy tax, impact fee and other fiscal benefits.

In Summary:
Redpoint provides high-level accounting, financial, economic analysis, and recommendations, and effectively delivers the associated findings, as a true partner in its clients’ real estate development and acquisition opportunity identification, selection, financing, deal structuring, and management activities. The firm is recognized for its ability to approach each assignment, strategically while remaining inside the bounds of generally accepted quantitative analysis frameworks and effectively mitigating for data deficiencies to accurately model complex deal and financing structures.