By Taylor Williams “Numbers never lie; they simply tell different stories depending on the math of the tellers.” Mexican-American poet Luis Alberto Urrea may not have been talking about commercial real estate development and investment when he wrote that line, but the implications of that statement are undeniably applicable to those fields. The use of numerical projections in commercial development and investment is different from employing sabermetrics in sports or using predictive analytics to diagnose illnesses in medicine. Hard costs are what they are, and the formulas that developers and investors rely on to make critical decisions tend to be well-established in their rigidity, even if their inputs can and do change. Respecting the time-tested veracity of these formulas can make the difference between coasting through a down cycle or being crushed by it. Yet this is a world in which complex equations, algorithms and computations increasingly influence key business decisions. And so the ability to accurately forecast, control and manipulate numerical inputs is beyond valuable. Underwriting represents the piece of the real estate development or acquisition process in which these numerical details are shoved under the microscope and relentlessly finagled in hopes of keeping a development or deal alive. …
