In February 2020, a real estate developer from Montreal, Quebec, Canada was pursuing the development of a new residential rental tower of over 200 units in a popular Montreal suburb. As the founder of the real estate development firm Legacy Development Group, the developer had to revise and adjust his development plan several times. He faced several obstacles in the process, including work stoppage due to the outbreak of the COVID-19 pandemic, zoning and regulatory issues, and changes in the real estate market. In September 2020, the developer had to re-evaluate his revised development plan in preparation for a meeting with his two partners, when the group would determine whether or not to pursue the project.
Legacy Development Group: A Pointe-Claire Residential Tower
Raymond L. Paquin, Michel Deslauriers, Manuel Gatt
Product #:W27680
Supplier:Ivey/Concordia
Discipline:Finance, General Management
Setting:Canada, 2021
Industries:
Geography:
Your Price:$10.54
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Learning Objectives
This case is suitable for courses in finance, real estate, and management at the advanced undergraduate or graduate level. This case offers students a unique look at the financial planning and risk management processes related to real estate development, especially in light of changing market and industry conditions. To develop a recommendation on whether to proceed with this project, students will develop a complete pro-forma and financial analysis. They will also weigh the remaining risks and uncertainties to explore the potential options for improving the revised project’s profitability. After working through the case and assignment questions, students will be able to
- assess and prioritize the current and anticipated future risks of this project—and if relevant, recommend steps to mitigate their impact on project profitability;
- develop relevant pro-forma and feasibility analyses to assess the project’s profitability, including exploring options to improve the project’s profitability;
- prepare a sensitivity analysis for some of the main assumptions; and
- recommend whether and how to proceed with this project, based on all completed analyses.