Worked example · Entitlement
The deal did not fail. It just took nineteen months longer than the model.
A worked example of an entitlement timeline, and why delay is the risk that quietly outranks cost.
A worked example, not a client file. The sequence is typical; the months are illustrative.
Cost overruns get the attention because they arrive as invoices. Delay arrives as nothing at all — no letter, no line item, just another month where the carry runs and nothing is sellable.
On a levered deal, delay is usually the larger of the two.
- 01Pre-application · modelled 1, took 2Staff are booked three weeks out. The first meeting produces a list of studies nobody budgeted.
- 02Studies · modelled 3, took 6Traffic, drainage, environmental, and a wetland delineation the seller swore was not needed. Two of them can run in parallel. The wetland one cannot.
- 03Formal submittal · modelled 1, took 1The only stage that behaved.
- 04Review cycles · modelled 3, took 9Three rounds of comments rather than one. Each round is a full review clock, not a continuation of the last.
- 05Public hearing · modelled 2, took 7Continued once at a neighbour's request, then again when a commissioner was absent. Hearings are calendars, not decisions.
- 06Recording and permits · modelled 1, took 5Conditions of approval had to be satisfied before recording, and two of them needed a utility company with its own queue.
Why the model broke
Not because any single step was unreasonable. Because the model assumed every step ran once, in sequence, at the posted duration — and entitlement is a queue of queues, each with its own clock and each able to restart.
Nineteen months of carry on a levered basis is not a delay. It is the return.
What we would actually do
- Model three timelines: posted, realistic, and bad. Underwrite the middle one and survive the third.
- Ask the jurisdiction how many review rounds the last five comparable applications took. It is public, and it is the single most predictive number available.
- Identify which studies can run in parallel and start those the week of the LOI, not after closing.
- Price the carry per month explicitly so the cost of a slipped hearing is visible on the page rather than absorbed.
- Negotiate the contingency period against the realistic timeline, not the posted one.
- Know which conditions of approval depend on a third party, because those are the ones with no deadline at all.
This deal still made money. It made roughly a third of what the model said, which is a different conversation to have before an investor's capital is in than after.