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THE ROONEY GROUP
Building the Future
2015 Business Plan For
110 11th St. SE, Calgary
Jordan Rooney
Contents
1.0
Executive Summary ........................................................................................................................... 1
2.0
Introduction ...................................................................................................................................... 2
2.1
What we do ................................................................................................................................... 2
2.2
Industry Overview ......................................................................................................................... 2
3.0
Operations Plan................................................................................................................................. 3
3.1
Operational Structure ................................................................................................................... 3
3.2
Pre-revenue operations ................................................................................................................ 4
3.3
Infrastructure Overview ................................................................................................................ 4
3.4
Lease Operations .......................................................................................................................... 7
4.0
Human Resources Plan ..................................................................................................................... 8
5.0
Marketing Plan ................................................................................................................................ 10
5.1
Marketing for Investors .............................................................................................................. 10
5.2
Marketing for Revenue ............................................................................................................... 10
5.2.1 Product ....................................................................................................................................... 10
5.2.2 Price ........................................................................................................................................... 10
5.2.3 Place ........................................................................................................................................... 11
5.2.4 Promotion .................................................................................................................................. 11
6.0
Financial Plan .................................................................................................................................. 12
6.1
Capital Budget ............................................................................................................................. 12
6.2
Capital Structure ......................................................................................................................... 12
6.3
Net Profit and Cash Flow to Investors ........................................................................................ 13
6.4
Critical Variable & Sensitivity Analysis ........................................................................................ 14
6.4.1
Occupancy Rate................................................................................................................... 14
6.4.2
Market Price ........................................................................................................................ 15
6.4.3
Economic Trends ................................................................................................................. 16
7.0
Conclusion and Feasibility ............................................................................................................... 16
8.0
Appendices ...................................................................................................................................... 17
Appendix A: Financial Projections........................................................................................................... 17
Appendix B: Floor Plan ............................................................................................................................ 17
Tables
Table 3-1 Operating Expenses ...................................................................................................................... 3
Table 6-1 Capital Budget ............................................................................................................................. 12
Table 6-2 Occupancy Sensitivity ................................................................................................................. 15
Table 6-3 Price Sensitivity ........................................................................................................................... 15
Figures
Figure 2-1 Possible Building Design .............................................................................................................. 2
Figure 3-1 Possible Building Design 2 ........................................................................................................... 5
Figure 3-2 Floor Plan: 1st Floor ...................................................................................................................... 6
Figure 3-3 Possible Interior Design ............................................................................................................... 7
Figure 4-1 Organizational Structure Year 1................................................................................................... 9
Figure 4-2 Organizational Structure Year 2 Onward ..................................................................................... 9
Figure 5-1 Product....................................................................................................................................... 10
Figure 6-1 Occupancy Rates ........................................................................................................................ 13
Figure 6-2 Occupancy Rates ........................................................................................................................ 13
Figure 6-3 Occupancy Rates ........................................................................................................................ 13
Figure 6-4 Occupancy Rates ........................................................................................................................ 13
1
1.0 Executive Summary
The Rooney Group is a commercial real estate development company based out of Calgary,
Alberta. We offer office solutions for small to medium businesses. This Project, located at 110
11th St. SE, just outside of downtown Calgary offers a prime location for the up and coming
businesses without the premium prices that the true downtown commands. We will offer four
storeys of office space for a total of 322,500 square feet of revenue generating, leasable space.
We give tenants the freedom of allowing leasehold improvements to cater to a wide variety of
tenant needs. Our revenue model includes offering competitive prices, especially for our
location, which will attract tenants who may have otherwise not leased in our building.
The total capital investment will total $78,000,000 for the land, building and finishing costs with
a small contingency fund. For this project we will need a 100% equity capital structure. This
means approaching investors of all kinds, whether they be private or institutional, to invest the
required $76,500,000 of external funding.
The payback will be a 7.8% return on investment over 75 years with a 95% base case occupancy
rate. The net present value is positive at nearly 11.8 million, and present value of the net
equity is 90 million. The project responds most to changes in occupancy rate with a drop to
86% occupancy rate offering the required 7% return.
Overall, this project offers a very healthy return to investors, in line with general market. For a
more in depth discussion of operations, human resources, marketing, and financials please see
the full report below.
2
2.0 Introduction
2.1
What we do
The Rooney Group is a Calgary based, commercial real estate development company
specializing in premium low-rise office buildings in desirable locations. We offer small to
medium sized businesses the space to meet and collaborate in a productive and comfortable
environment. This business plan will focus on our flagship project at 110 11 th Street Southeast
in Calgary, Alberta. This office building will be four storeys tall and include green, energy
efficient structures, fixtures and design. For an approximate idea of what this project will look
like when completed, see figure 2-1.
Figure 2-1 Possible Building Design
With our tagline of “building
the future” we show our
commitment to the growth and
prosperity of business owners
and the economic development
of Calgary, Canada, and North
America. By offering desirable
locations for people to work
and collaborate in productive
spaces we are essentially
“building the future” of
business, first with our flagship
project in the Calgary area before turning our efforts to western Canada and in the long-term,
North America.
In essence we are an intermediary, acting on behalf of the shareholders to hire contractors,
landscapers, and architects to construct the building, as well as to manage the building once it
is built. We act as a management firm to see the vision of a revenue generating office building
through to reality.
2.2
Industry Overview
Traditionally, Calgary has been a prime market for real estate in general, benefitting from
several housing and commercial real estate booms throughout the 2000’s, namely from 20052007. Recently however, with the crash of oil prices in late 2014 many news outlets have been
reporting the dim outlook on Calgary real estate. Commercial real estate, in particular, does
not have a very good outlook in the near future for Calgary. This, however, is in the near future
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(approximately 2-4 years). In the long run Calgary is poised to continue growing at a rapid rate,
above the national average. Part of the reason for this is that Calgary is much more diversified
than Alberta as a whole. They have a strong banking and financial services sector, which is
shown in the fact that Calgary has the most national headquarters of any other city in Canada,
outside of Toronto.
Income in Alberta is also high, and tax rates are low both for individuals and corporations. For a
full discussion on tax implications, see section 6.4.3. This leads to the fact that overall, Calgary
commercial real estate demands a higher price than most of Canada. For a discussion of our
price points, see section 5.2.2.
3.0 Operations Plan
3.1
Operational Structure
The Rooney Group will use an incorporated legal designation due to the fact that we are a large
enterprise dealing with a lot of capital and paying out large dividends that are very sensitive to
tax rates. In addition, we would like to create a separate legal entity, separating the owners
from the business itself. This is done in order to mitigate risk for the managing partner and to
separate the managing partner from the risks associated with running a business of this size
and the consequences if this project were to fall through. It will limit liability and give us
greater access to capital, something that is essential to our success.
This project will encompass an initial capital investment of $78,000,000. $72,000,000 of this
will be direct building costs for the project. We have allotted $2.5 million for the land required
to build this project, and $100,000 for the furniture and fixtures required to finish the project
and have it ready to be leased.
For a full list of estimated operating costs once the building is completed, see table 3-1.
Table 3-1 Operating Expenses
Operating Expenses
2015
2016
2017
2018
2019
Accounting and Legal
35,000
35,875
36,772
37,691
38,633
2,000
2,050
2,101
2,154
2,208
10,000
10,250
10,506
10,769
11,038
120,000
123,000
126,075
129,227
132,458
1,000,000
1,025,000
1,050,625
1,076,891
1,103,813
Advertizing (Marketing)
General Supplies
Insurance
Property Taxes
4
Telephone
36,000
36,900
37,823
38,768
39,737
1,170,000
1,199,250
1,229,231
1,259,962
1,291,461
30,000
30,750
31,519
32,307
33,114
716,000
534,025
547,376
561,060
575,087
36,036
20,567
21,081
21,608
22,149
38,530
39,493
40,480
41,492
42,529
579,563
37,946
42,395
44,107
45,210
1,450,000
2,840,400
2,723,904
2,612,644
2,506,295
-
-
-
-
-
5,223,128
5,935,506
5,899,888
5,868,680
5,843,732
Utilities
Repair and Maintenance
Wages
Employee Benefits
(salaried)
Employee Benefits
(wages)
Misc. Variable Costs %
Sales
Capital Cost Allowance
Debt Interest
Total Operating
Expenses
3.2
Pre-revenue operations
We will allow for one year building period before achieving revenues in year 2. We have
included the first year costs of leasing an office space and wages for 9 employees into year two
costs under miscellaneous costs for illustration sake as we achieve no revenues and incur only
these costs.
3.3
Infrastructure Overview
The building itself will cost $72,000,000 to complete. This is based off estimates of $200 per
square foot given by an experienced developer of commercial and retail space in the Calgary
area.
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Once our own building is completed, we will require a small office space for 9 Workers with the
other remaining employees not having an office. We will also have a common area or break
room and several contingency offices for employees who will be involved in the building of our
next project. Please see
Figure 3-1 Possible Building Design 2
figure 3-2 for a floor plan for
the first floor, including the
lobby and our offices. For a
floor plan of floors 2-4, see
appendix B.
We have designed the
building to offer the
maximum number of “Csuite” offices with windows
surrounding the entire
outside of the building,
adding value to the space,
and justifying our price point.
For a further discussion on price points see section 5.2.2.
We have purposely made the floor plan very simple in order to leave almost all of the interior
design of the building up to tenants as tenant needs can vary greatly in terms of design and
square footage. In addition, leasehold improvements will be required by tenants. For a further
discussion on leasehold improvements, see section 3.4 below.
6
As discussed in section 3.2, we will lease out space on the first floor, which we have designed
and is in the floor plan below. We have chosen this space as we have deemed it the least
desirable offices in the building as it is on the first floor and has no windows. This will increase
the value to other tenants by offering better spaces to them as opposed to ourselves taking the
most desirable office space in the building.
Figure 3-2 Floor Plan: 1st Floor
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3.4
Lease Operations
Lease operations are the cornerstone of our business and essentially provide the only source of
revenues to The Rooney Group. As we will discuss in section 6.4.1, these occupancy levels are
the most critical factor to the success of this business.
The total square footage of the buildings is 360,000 square feet. Of this 89.6%, or 322,500
square feet will be usable and leasable office space.
We will lease out 4,000 square feet of this office for operations once it is built for the staff in
charge of running the building as well as developers and sales who will be there for a short
period of time until the final start-up operations of the building are complete, we will discuss
these positions more in the human resources plan in section 4.
Figure 3-3 Possible Interior Design
For the tenants, it is at their discretion
how much square footage is leased. It
is not required to lease the entire
floor. However, in the event of
competitive bidding, preference will
be given to the tenant who provides
the most revenue to the building, that
is, a combination of square footage
and price so as to increase total
billable occupancy of the building.
We do have an idea of what we would like to see in the leased space, such as that in figure 3-3.
As said before, leasehold improvements are required and subject to approval at the sole
discretion of the managing partner. All changes to the building must be presented and
submitted in advance to management of the building and will undergo an approval process.
This decision of approving or rejecting the proposed changes however, is the final decision of
the managing partner. If required, we will work with prospective tenants on designs but at this
stage, before we have clients secured, it is impractical to speculate on what the internal design
of the building will look like, as illustrated in the floor plan above. The business plan and
financial projections will be updated as design and leasable space due to hallway construction
etc. are known.
In terms of the type of tenants we will accept, it is not our place to discriminate who leases
space, not to mention the potential legal implications of this. If there is a potential conflict of
interest between tenants, we recommend that the potential tenant does not lease the space.
In the lease negotiation process we will provide a list of what companies hold space in the
building only to serious prospective clients, this information is otherwise confidential to the
tenants who do not want their place of business known to the public.
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4.0 Human Resources Plan
The Rooney group will hire primarily young professionals starting their career with the guidance
of several board of directors with experience in commercial real estate development in both
the Calgary and Vancouver areas. We will hire young professionals just starting their careers as
well as those with several years’ experience in the commercial real estate industry who share
the vision of the entrepreneurs of building this business not just into a single project business,
but one with projects all over North America. As we are hiring young professionals, a great deal
of guidance and advice will be drawn from our board of directors with invaluable knowledge of
the industry.
We are looking for people to grow with us, people who will delay large salary increases with the
intent on being able to cash in as the business becomes more and more successful. These
employees will be able to move quickly up the organizations hierarchy.
We want long term employees who are a good fit and are deeply involved and engaged in the
operations of the company. As we do not have an HR department to deal with hiring and other
employee issues almost all of these will have to dealt with by the managing partner, which
could be very costly for the business. Due to this we are aiming to have a very low turnover
rate and offer substantial pay raises for the superior work our employees do.
Our sales team will have experience as commercial realtors with the expertise and connections
to entice new tenants to come to our building and the selling capabilities to persuade
companies to switch to our building. They will also have the skills to seek out tenants of old
buildings who may be looking for a modern, state of the art space to do business.
The company will consist of myself, the managing partner, 3 managers of the building, a sales
department, developers involved in the construction of the building, reception personnel,
security, and janitorial staff.
See figure 4-1 on page 9 for our organizational structure during the first year:
9
Figure 4-1 Organizational Structure Year 1
Managing
Partner
Operations
Manager
Finance
Manager
Reception (2)
Maintenance
Manager
Sales (2)
Developers
(3)
Janitorial (4)
Security (4)
Figure 4-2 shows our Organizational Structure for this project every year after year 1 or once
the developers and one sales staff position are considered unnecessary.
Figure 4-2 Organizational Structure Year 2 Onward
Managing
Partner
Operations
Manager
Reception (2)
Security (4)
Finance
Manager
Sales (1)
Maintenance
Manager
Janitorial (4)
10
5.0 Marketing Plan
5.1
Marketing for Investors
A large part of our marketing will deal with appealing to investors and getting them to put
money into our project. As such, it is important that we have a strong business plan and
financial projections for the long term in order to entice investors to put money into our
project. The financial aspect and projections for this project are discussed in section 6.
In terms of marketing, in order to initially attract investors we will send out a prospectus of
sorts. Similar to a business plan but much more technical detailing all investment needed, costs
the building will incur and profits it will generate as well as numerous what-if analyses and
break evens showcasing the potential return on investment for shareholders.
For this we will raise 98% of the funds needed from external equity investment. For this
investment we are aiming to give up a 92.5% claim to cash flows and assets. This may not be
achievable and we may have to give more equity, but it is what we are aiming for and will be a
good starting point in negotiations. We will be able to get this premium on equity stake
because it is compensation for the company taking on a large part of the risk as well as the fee
for operations and labor involved in turning this business from an idea into reality.
We will discuss the return on investment and cash flows to investors in section 6.3
5.2
Marketing for Revenue
Figure 5-1 Product
5.2.1 Product
As stated previously in the
introduction and operations, The
Rooney Group will provide office
solutions for small to medium
enterprises in a prime location just
outside of downtown Calgary. We
will provide office space available
for lease at competitive price
points. This includes building
services such as a reception area,
free elevator access, janitorial services, and the opportunity for leasehold improvements suited
to almost any company’s needs.
5.2.2 Price
The Rooney Group will offer competitive priced office space in line with the going rates for the
area, with a premium for the near downtown location. For the first floor we will charge less
11
than floors 2-4, this is the norm for most office buildings, that as the floor number increases so
does the price per square foot. As the floors get higher, they offer a better view, are more
secluded, more prestigious etc. Price on the first floor is $25 per square foot and on all
subsequent floors it is $27 per square foot.
These price points are of course subject to negotiation as we will aim to have higher prices per
square foot for small lease space tenants while larger lease space tenants may receive lower
price points than our smaller tenants. The prices of $25 for the first floor and $27 for floors 2-4
are simply estimates of what we will be able to charge within the current market for office
space in Calgary, which may change between now and the time that lease agreements are
signed.
As the pre-opening lease subscription rate in Calgary is at 57% we believe we can easily get 60%
based on our desirable location, which will be discussed in the next section, 5.2.3. In addition,
to this pre lease subscription rate, we are conservatively estimating that we will be able to
achieve a 70% occupancy rate within the first year with moderate growth in the subsequent
years up to a peak occupancy level of 95%
5.2.3 Place
The Rooney Group’s flagship project will be located at 110 11th Avenue Southeast, Calgary,
Alberta along in the beltline neighborhood a mere two blocks from the major thoroughfare of
Macleod Trail.
While we have said before that the economic outlook in the near future does not look positive
for Calgary it is our contention that it will eventually turn around. This will result in continued
growth to the point where our location will be considered prime, downtown, location as
opposed to being located on the “beltline,” the name for the neighborhood adjacent to
Calgary’s south downtown.
The idea for this place is to secure prime real estate that, in the future, will be considered true
downtown real estate with a much larger price tag for both the land as well as lease rates. We
have not factored this into our financial plan (see section 6.0) as this is not guaranteed and may
misrepresent the opportunity currently in place.
5.2.4 Promotion
We will utilize relatively little conventional promotion or advertising, as our business relies on
company to company sales and is not dependent on the average consumer as opposed to other
businesses such as retail and consumer products. Instead, we will utilize a sales team of 2
personnel for the initial year of operations to secure tenants, and one sales position after the
first year to achieve our target 95% occupancy rate. This sales team will be made up of
12
individuals with commercial realty experience and who have the sales skills to entice companies
to lease space in our building.
We will leverage the fact that our offices are brand new and state of the art, offering a prime
location and competitive price points. As we are dealing with small to medium sized
businesses, a large proportion of our tenants may be in their first dedicated office space. We
also deal with medium sized businesses that may be coming from very small office spaces to
the larger, medium sized office solutions we will provide. Essentially it is the place, product,
and price of the marketing mix that will speak for themselves with the personalized promotion
mix of our sales team that will get new tenants into our building instead of our competitors’.
6.0 Financial Plan
6.1
Capital Budget
We are looking to raise $78,000,000. 74,600,000 of this will be for budgeted costs while the
remaining $3,400,000 will be for unforeseen expenditures and will be paid back to investors in
the first couple of years if there is no need at the start-up phase and no foreseen capital
expenditures or improvements are needed in the foreseeable future or next couple of years.
See table 6-1 below for a breakdown of our capital budget.
Table 6-1 Capital Budget
Capital Expenditure
Land
Buildings
Furniture & Fixtures
Total
Contingency Capital
Capital Raising
6.2
Cost
2,500,00
72,000,000
100,000
74,600,000
3,400,000
78,000,000
In addition to these start-up capital
costs we will also be performing
renovations on the building every
15 years. This is a reasonable
amount of time for the current
finishing’s in the building to stand
the test of time both in style and in
substance.
Capital Structure
We are hoping to get a 100% equity structure in the business for our flagship project. I, being
the managing partner will invest $1,500,000 of my own money into the project with the
remaining $76,500,000 coming from private equity, preferably from an institutional asset
management firm. We are not looking for venture capital and prefer to make most decisions
with the guidance of our board and not with a large outside influence of venture capital.
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6.3
Net Profit and Cash Flow to Investors
The revenues created from this office building are quite substantial. In turn, with relatively low
costs, profits are projected to be quite healthy from the start of operations until the end of the
buildings life, assuming all critical variables stay within a certain range. For an analysis of these
critical variables, see section 6.4.
In terms of dividends, the managing partner will hold a different class of shares than the
owners investing the external equity that are not involved in the operations of the business.
The managing partner intends to defer his share of dividend compensation to reinvest in The
Rooney Group for future projects. In essence, I will be deferring my dividend payments in turn
for a larger payout in the future. These plans are not reflected in the financial statements in
appendix A as we wanted to give an accurate representation of the potential cash flows the
managing partner could receive for this business if he were to pay himself in the conventional
way through yearly dividends on top of salary.
These dividends average approximately $11,150,000 total per year. Myself, as the managing
partner, at the potential 7.5% stake would have an average pre-tax pay of $835,893 on top of
the yearly $50,000 plus inflation salary I will be paying myself. This will possibly also be
reinvested into the company in order to fund equity stakes in future projects. For the external
investors, at their 92.5% stake, all together they will receive an average of $10,309,352 yearly
dividends on their investment. This leads to an average yearly return of 13.5% on investment.
Figure 6-1 Occupancy Rates
As occupancy, or leased square footage is our
only form of revenue, it is the single most
important variable to these cash flows to
investors. For an in depth discussion of all
critical variables, see section 6.4. For
projections of our expected occupancy in years
1-8, please see figure 6-1.
Occupancy
Figure 6-2 Occupancy Rates
100%
90%
Figure 6-3 Occupancy Rates
80%
70%
Figure 6-4 Occupancy Rates
60%
50%
0
2
4
6
8
10
From these occupancy rates we have devised an
income statement. Since most of the costs are fixed, the occupancy rate and price point allow
us to find net income. Over the 75 year life of the asset net income grows at an average of
4.7% year over year. This is substantially higher than the 2.5% inflation rate assumed. For an
illustration of income growth over 75 years please see figure 6-2. For income statements for
the next 75 years see appendix A.
14
Figure 6-2 Net Income & Growth
6.4
Critical Variable & Sensitivity Analysis
For a full sensitivity analysis please see appendix A.
6.4.1 Occupancy Rate
Above all the most obvious and potentially most critical variable is the occupancy rate. To put it
simply, if we do not have tenants, there are no revenues. One of the biggest variables that
contribute to this are economic trends, which will be discussed in full in section 6.5.3, but
marketing is also a contributing factor to occupancy rate. Overall, this creates the most
sensitive variable, not in terms of becoming bankrupt, but in providing an adequate return on
investment for shareholders. We must have an average of 86% occupancy to achieve this 7.0%
required return on investment. In order to become bankrupt the occupancy rate would have to
drop substantially lower, to an average of approximately 40% over the 75 years. This however,
can be considered bankrupt as it makes the project completely unfeasible and very unlikely to
get external equity investment. Occupancy rate could ultimately make or break the business.
See table 6-2 for a summary of sensitivity to occupancy rate.
15
Table 6-2 Occupancy Sensitivity
Occupancy
Average Profit
Net Payback
IRR
38%
(236,382)
(26,156,031)
-0.9%
48%
1,629,319
115,637,287
2.2%
57%
3,438,984
253,171,819
3.8%
67%
5,224,776
388,892,012
5.0%
76%
7,001,212
523,901,117
6.1%
86%
8,777,447
658,895,019
7.0%
95% (base case)
10,553,683
793,888,920
7.8%
100%
11,441,792
861,385,212
8.4%
6.4.2 Market Price
Assuming that occupancy is high, or adequate, the next largest critical variable for The Rooney
Group is the price of rent. This is somewhat out of our control as market forces determine this
and we are not large enough to be a price setter, we are a price taker with little bargaining
power. With that being said, this business is much less sensitive to price changes in terms of
Table 6-3 Price Sensitivity
return on investment as a
measuring stick for performance.
Price
Occupancy
IRR
An 8.9% drop in price is the
critical point for this building as it
$11.15
base
0.0%
returns 7% on equity, as seen in
$24.25
base
7.0%
table 6-3. Price must drop
drastically lower, 58% lower than
$26.62
base
7.8%
(base case)
the base case price, to an average
of $11.15 per square foot to get an internal rate of return of 0% at our base case of 95%
occupancy. Since this level of a price drop is somewhat impossible to happen in the Calgary
market even with the crash in oil prices we can conclude that the IRR is not very sensitive to
price changes. It is the combination of a drop in occupancy and price levels that the business is
sensitive to.
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6.4.3 Economic Trends
As with all real estate, valuations and rents are largely determined by market forces beyond any
one firm’s control leaving the business susceptible to both recession as well as economic
growth.
This goes in line with our occupancy rate and market price and is a potential contributing factor
to low revenues as opposed to simply having poor marketing. These are the general market
conditions for the Calgary area. This is again out of our control as it is determined by aggregate
economic forces and can contribute to the fluctuation of the critical variables of occupancy rate
and market price.
Economic trends can also lead to changing government policy. While Alberta has typically been
a low tax province for corporations, this is not a set rate and is subject to changes. With the
crash in oil prices the provincial government has set out new budgets that show large deficits.
This may be a signal that in the future they may try to balance these budgets through raising
the corporate tax rates. This would cut into our net profit quite substantially and offer a lower
return to investors. If this happens, the equity has already been raised so the survival of this
business is not at stake, however, it may create troubles for future projects in raising funding if
our track record does not show an adequate return.
7.0 Conclusion and Feasibility
If the base case price and occupancy are achieved, this project is extremely feasible. The
financial plan is arguably the most crucial part to the success of this business as it is required to
get funding. Before actual operations can start however, the design of the building would have
to be revisited, finding the optimal size in order to lower costs per square foot, maximize price,
and ultimately lead to the highest profits and return on investment. For instance, Calgary is a
sprawling urban city and a more suburban location may offer a better opportunity than one just
outside of downtown. Also, a more modern building design may lead to higher building costs,
but may also get higher prices per square foot. This will require substantial analysis that will
take much longer than the three months spent preparing this business plan, and will also
require a great deal of experience within the industry, not just guidance from an experienced
board of directors. While the current report of this opportunity may not be a bad plan, I
believe that there are possibly better alternatives that will offer a better return on investment
that need to be explored.
As this is a business that can take many different forms several business plans may need to be
prepared all taking different angles to the approach in order to find the one that suits the
market and circumstances the best. Picking the right first project is vital to The Rooney Group
getting off the ground and being able to engage in future development.
17
In conclusion, if all goes according to plan, this project is very feasible, offering a healthy 7.8%
return on investment to investors and a long life of steady, predictable cash flows. The most
risky part is getting this building from a drawing on paper into a reality. Once the building is
built and operations are established, it will be a relatively easy business to run with large
compensation for both owners and investors.
8.0 Appendices
Appendix A: Financial Projections
A full in depth financial model and projections for the next 75 years is included in a separate
excel file titled Rooney Group Financial Projections.
Appendix B: Floor Plan
See figure 8-1 for the floor plan for floors 2-4, as stated previously, this is essentially the same
as floor 1, the exception being that the lobby space is now used as office space, most likely for
C-level suites.