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Homework answers / question archive / Part Two Question: 1
Part Two Question:
1. Calculate the Max Debt for this property.
2. Calculate the amount of equity needed for this property.
3. Calculation the Net Sale Proceeds to Owner.
|
Going In Cap Rate |
7.25% |
|
Terminal Cap Rate |
6.75% |
|
Loan Interest Rate |
4.15% |
|
Max loan to value for debt |
60% |
|
Required Debt Service Coverage |
1.45 |
|
Discount Rate |
12% |
|
Loan Amortization Period |
20 years |
|
Loan Term |
10 years |
|
Loan Fees |
2.3% |
Part One Direction
Complete pro forma for NOI
Commercial Complex 4 tenants Property will be held for 5 years
|
Tenant |
Lease Type |
Size |
Current Lease Rate |
Rent Growth |
CAM |
|
Bank |
NNN |
Outparcel |
$80,000/yr |
1.75% |
|
|
|
|
|
$4.25/sq ft |
Tanant revenue is expected to grow at 2.35% per year |
Limited to $2.50 per sq foot |
|
Retailer |
Percentage |
3,125 |
Plus 4.25% revenue |
Year 1 Revenues are $315,000 |
Pro rata on sq feet |
|
Office |
|
5,000 |
$18.25/sq ft |
CPI |
Pro rata on sq feet |
|
OP EX Category |
Cost |
Growth Rate |
|
Utilities |
$1.25 per sq ft |
2.85% per year |
|
Taxes |
$9,627 per year |
2.75% per year |
|
Insurance |
$0.75 per sq ft |
2.0% per year |
|
Maintenance |
$1.25 per sq ft |
3.15% per year |
|
CPI |
Rate |
|
Years 1-3 |
1.75% |
|
Years 4-7 |
2.25% |
|
Years 8-10 |
3.25% |
