Reforecasting a condominium development after a 45-day delay

The prior model carried substantial completion on September 15 and the first unit closings five days later. Forty-one of 84 units were under contract for $82.60 million. The May cost report showed $15.20 million remaining to complete. The construction loan stood at $48.60 million, leaving $13.40 million undrawn, including $2.10 million of interest reserve.

The next reporting set changes five facts. The contractor schedule moves substantial completion to October 30. The sales report adds contracts on units 1704, 2102 and 3101 for a combined $5.85 million and records the cancellation of unit 2603, previously under contract for $2.40 million. The cost report carries a $780,000 pending façade change order. Draw 18 excludes that amount. The lender collateral schedule predates all four sales changes.

None of those facts is difficult to summarize. The work lies in rebuilding the timing. The three new contracts increase contracted revenue, but none produces current liquidity. The cancellation removes an October closing and its debt paydown before any resale assumption is introduced. The delay extends the period in which the loan funds costs and accrues interest without receiving release proceeds. The façade exposure enters cost to complete even though it is absent from the current lender draw.

The prior closing schedule assumed 12 closings in September, 14 in October, eight in November and seven in December. Moving substantial completion by 45 days removes the September and October closings; it does not simply add 45 days to every row. The revised case starts with 14 closings in November and carries the contracted tail through February, using the closing sequence in the unit schedule rather than a blended absorption rate.

The four sales changes are applied before that schedule is rephased. Units 1704, 2102 and 3101 enter at their executed prices and their expected November, December and January closings. At an assumed 4% selling cost, their estimated unit release payments are $1.260 million, $1.404 million and $1.548 million respectively; each exceeds its minimum on the lender schedule. Their deposits remain escrow balances, not sources in the construction cash flow.

Unit 2603 is handled differently. Its $2.40 million contract, October closing and $1.728 million release payment are removed. The unit returns to available inventory at a $2.32 million asking price in the base case, with a projected March closing. That resale is an underwriting assumption; it does not remain in contracted sales merely because the prior model already contained the unit.

The resulting release schedule matters more to the loan than the $3.45 million increase in contracted gross sales. The prior case paid $32.2 million of principal in September and October. The revised case pays none. By December 31 the project has generated $34.8 million of release payments rather than $50.9 million, leaving $16.1 million more principal outstanding before considering the revised construction draws.

The May cost report still shows $15.20 million remaining because the façade change has not been posted to the approved budget. The reforecast carries the $780,000 exposure in cost to complete, adds $330,000 of extended general conditions and $160,000 for the additional insurance, utilities and site-security period. Remaining cost therefore moves to $16.47 million before any assumed recovery from the contractor or design team.

That $1.27 million increase is not inserted into the next construction draw as a single amount. The $490,000 of time-related costs follows the revised schedule. The façade work follows the expected installation and payment months. Because draw 18 excludes the pending change order, the base case treats the $780,000 as borrower-funded until it becomes an approved loan cost. An alternate case can fund it from a lender-approved budget reallocation, but that treatment also reduces the loan contingency available elsewhere.

This is where the remaining interest reserve has to be recalculated rather than copied. The project entered the period with $2.10 million in the reserve, but the prior reserve assumed September release proceeds. Under the revised schedule, the loan continues to fund construction through October while the first $32.2 million of planned paydown disappears. Interest is calculated on the monthly opening balance, advances and release payments in the same schedule. The remaining interest requirement rises from $2.30 million to $3.02 million. Against the $2.10 million remaining reserve, the base case carries a $920,000 funding gap to equity.

The construction loan now peaks at $61.2 million in late October, compared with $58.7 million in the prior case. That leaves $800,000 of commitment headroom before the November closings. It does not mean $800,000 is freely available: the same remaining commitment still has to cover eligible construction costs and capitalized interest until release payments begin.

The model does not treat the additional cost, delayed proceeds and additional interest as three separate observations. They meet in the monthly sources and uses. In the base case, the borrower-funded façade exposure and extended project costs increase peak sponsor equity from $35.4 million to $37.1 million. The later loan paydown moves distributions out with the closing schedule and extends projected sellout from March 31 to May 15.

The project-level IRR falls from 21.4% to 18.9%. Only part of that movement comes from the $1.27 million increase in remaining cost. The larger effect is temporal: equity remains in the project longer, the construction loan remains near its peak longer and the first meaningful residual sales cash reaches equity later. A summary of the changed documents would identify every input and still miss that result.

The revised case is not a single inevitable answer. The funding treatment of the façade change, the resale of unit 2603 and any recovery of the extension costs produce different capital calls and return profiles from the same reconciled project record.

Cap Orbit can work across the May sales report, unit matrix, executed contracts, contractor schedule, cost report, change-order log, draw 18, loan agreement, collateral schedule, lender statement and the existing underwriting workbook in the same deal. The first step is not a general summary. It is establishing the reporting cutoff for each source and reconciling the four changed units against both the sales record and the lender release schedule.

From there, you can have Cap Orbit rephase the contracted-unit schedule, calculate the unit release payments under the actual loan terms, rebuild cost to complete from the current cost report and change-order log, and update the monthly debt and equity cash flow in your existing model. The extracted contract price, revised milestone, outstanding loan balance and reported cost each retain a source trace. The resale date for unit 2603, the amount carried for the pending change and its funding treatment remain visible model assumptions.

The same deal record supports the alternate cases that matter here. Hold the cancelled unit at $2.32 million or reprice it. Carry the façade change as borrower-funded or assume a lender-approved reallocation. Recover all, part or none of the extended general conditions. Each case starts from the same reconciled sales, cost and loan records and returns the same set of outputs: unit closings, release payments, remaining draws, interest, peak debt, peak equity, sellout and returns.

That is the standard for AI on this asset class. The deliverable is not an explanation of why the project changed. It is the revised model, with the current deal reconstructed at the resolution at which the loan is repaid and the equity return is earned.