Real estate development is a complex and dynamic field where accurate financial modeling can make or break a project. For decades, spreadsheets have been the go-to tool for creating proformas—a set of calculations forecasting the financial return a proposed development will likely generate. While spreadsheets offer a familiar starting point, they ultimately constrain rather than empower.

The complex, multidimensional nature of modern development projects demands more sophisticated tools that can provide a holistic view and deeper insights. By moving beyond the limitations of cells, columns, and formulas, developers can unlock new project understanding and management levels that spreadsheets simply cannot deliver. At Outer Labs, we’ve developed platforms that allow users to access data quickly, easily, and reliably. Through our work, we’ve found three key reasons why the traditional spreadsheet falls short in modern real estate development.

Stale and Cumbersome

For a project to be successful, developers must stay current with constantly shifting variables such as construction costs, interest rates, and market demand. Spreadsheet-based proformas become outdated quickly, failing to reflect the latest market conditions and project changes. Keeping this data up-to-date requires time-consuming, constant, manual updates. Creating and maintaining sophisticated financial models requires advanced skills and time investment. This complexity can lead to errors, inconsistencies, and difficulty interpreting results. The static nature of spreadsheet-based proformas can lead to missed opportunities or inaccurate projections, potentially impacting crucial investment decisions. 

As we’ve shared in previous posts, the first step to any project is to get your data house in order. Outer Labs begins every project by automating the centralization of data sources into a common data model. We use modern software techniques to ensure the stability and consistency of information. Once this is accomplished, we build tools that directly draw information from this source of truth, so each proforma, feasibility study, design study,  report, etc., reflects up-to-date information, is easily organized, and customizable to each client’s preferences. No more tedious manual entry or costly inconsistencies. The dynamic nature of our software saves users time and gives them access to the latest data. 

Lack of Accountability 

Collaboration and version control are significant challenges when using spreadsheets. Multiple team members may work on the same spreadsheet, making it difficult to track changes, assign responsibility, or maintain a clear audit trail. This lack of accountability can lead to confusion, errors, and potential conflicts within the development team. Additionally, without proper authorship tracking, it becomes challenging to identify who made specific assumptions or changes, which is crucial for informed decision-making.

Each tool we build at Outer Labs is an opportunity to provide accountability and guidance. Where a spreadsheet cannot track changes or assign responsibilities, our tools allow users to see who entered a new parameter, provide insight into their reasoning, and leave room for comments and further discussion. We create opportunities for data reconciliation so multiple users can work seamlessly towards a common goal and communicate holistically. Software that prioritizes scalable communication avoids missed opportunities and costly schedule delays due to miscommunication.

Missing Scalability

At Outer Labs, we’ve helped clients evolve past spreadsheets by building platforms that prioritize design and usability. Once data automation and guidelines are in place, users need easy access to information at various scales to enable decision-making. Projects can span several years, depending on their size and complexity. During this time, a developer must constantly reference high-level financial metrics and detailed line-by-line cost item information. Being able to zoom in and out of data is critical. 

Seamless cross-referencing is key to moving between scales of information. Developers often need to reference multiple data sets when analyzing project costs, such as building construction costs, financing rates, and the project schedule. Instead of opening a new file or tab, we prioritize seamless views and graphics of relevant information. Users who can zoom in and out of data sets and access qualitative and contextual information will save time and get answers to complex questions faster. 

Formatting plays an equally important role. Spreadsheets today are an open world of flexible cells that allow users to set up files to meet their unique needs. However, this can lead to inconsistent formats between various projects, making it difficult to compare metrics. We’ve found that once an approach and format have been established, implementing consistency in formatting across a platform can allow for easier visualization, leading to quicker insights.

Our comprehensive approach has yielded products that have replaced spreadsheets by automating data entry, enhanced communication by providing methods of accountability, and enabled action with seamless cross-referencing, consistent formatting, and real-time information throughout the design process. As developers seek to maximize deals and streamline their processes, it's time to consider more sophisticated solutions.

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