The final will need you to create a spreadsheet /proforma of the cash flows from a property. All you have to do is input the cash flow on a monthly basis tenant by tenant and expense by expense.
This assignment is to create an analysis for determining a price for purchasing a property, by projecting rents, expense pass throughs, expenses, capital over a holding period through the sale. Below are is all the information that you need to do the calculations and determine the metrics behind the investment.
Market rent TBD Growth rate 2.5% for everything Rent Roll Tenant SF Rent/yr /sf Stop Start Month Term Steps Tenant A 25,000 26 $9.40 1 10 3% per year Tenant B 30,000 25.5 $8.50 1 8 32 in yr 5 Tenant C 35,000 20 Net 1 12 N/A Tenant D 10,000 market 10 market 10 36 in month 67 Total The tenant will pay for expenses that have risen to a level above their expense stop. Net leases have a stop of zero, so they pay all reimbursable expense. Tenants A and B are base year while tenant C is Net. Comparable leases have recently been signed as follows Tenant SF Rent/yr /sf Stop free rent Term Steps X 12,000 29.50 by 3 10 $0.60 Y 9,000 30.25 by 3 10 2% Z 5,000 32 by 2 5 3% Aa 35,000 25 by 6 10.5 1.5% Vacancy credit loss 10% Expense Category Expense per foot Taxes 5 R&M 1 Insurance 0.25 Utilities 2 Payroll 0.85 Security 0.5 G&A 0.4 Total Reimbursable 10 Non Reimbursable Management 3% of EGI Assume zero rollover possibility. Downtime (vacancy at end of lease) 6 months Total Capital at rollover 25/sf growing at inflation From the above information, you should be able to create a proforma. Reversion 0.075 Discount Rate 9.5% Term 5 years Amortization 30 Rate 0.04 LTV 70 Looking for you to provide underwriting metrics including but not limited to the following: Cash flow after debt Service Cash on Cash Return Debt service coverage Debt yield Cap rate Equity multiple (total cash return divided by investment) Break even ratio.