Project Phasing Flexibility
David Geltner, Richard de Neufville · 2018
This chapter explains the difference between modular delay and phasing delay flexibility. It helps real estate developers to model phasing delay flexibility in a spreadsheet. The chapter explores quantitatively the value of phasing delay flexibility with a simple two-phase example project. The mechanism for modeling phase start-delay flexibility is to put a delay decision rule in the appropriate cells of the spreadsheet. The chapter presents the base plan for the stylized version of the Garden City project and project economics. It assumes that the first phase of the project starts immediately, without flexibility in the project start date. This is simply to distinguish the two types of options: overall project start delay versus subsequent phased production delay. The chapter focuses on just the value of the option to delay the start of a phase.