Based on the following information, develop a front door “Simple Financial Feasibility Analysis” (SFFA) for this project estimating the required minimum market gross rent per SF that will support development.
• 50,000 Milwaukee Downtown office building project.
• Acquisition & construction cost = $1,500,000;
• Estimated operating costs (to landlord) = $100,000/yr.
• Projected stabilized occupancy = 90%.
• Permanent loan available on completion at 10% (interest-only loan) with 120% debt service coverage (DCR) requirement on the net operating income, and 80% maximum loan-to-value(LTV) ratio.
What is the maximum loan amount?
$1,250, 000
$1, 200, 000
$1, 280,000
$1,300,00