Part Two Question: 1

Real Estate Mar 10, 2021

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