10 You are a Real Estate developer building a small office tower in Montreal. The construction will take one year and the units have all been pre-leased. 11 The stabilized NOI at opening will be $750,000 and comparable cap rates are 6%. 12 The construction lender is willing to finance the project based on the terms and conditions shown below. 13 a) Based on the budget, calculate the oustanding construction loan at the end of the year. 14 b) How much equity will you be able to withdraw at the end of the construction period if you take-out a mortgage with the terms and consitions shown below? 15 16 Please make your calculations to the "right of the data and rent roll" on this worksheet. 17 Upload your file onto Moodle by the deadline indicated on the course outline. 18 Grade (out of 10): 20 21 22 Development Budget: 19 24 Land 25 Site preparation 26 Hard costs 27 Professional fees 28 Permits 29 Project management 30 Lesing commissions 31 Other soft costs 32 33 Interest 34 TOTAL 2,000,000 250,000 8,000,000 300,000 77,000 150,000 16,000 195,000 10,988,000 109,000 11,097,000 36 37 Cash flov: 38 39 The land is purchased and site preparation 40 occur in the first month. The soft cost 41 (excluding interest) are evenly distributed 42 over the 12 month period. The hard costs 43 are evenly dirtibuted over month 3 to month 44 12. All cash flows occur at the end of the 45 month. 46 47 48 49 Construction loan: 50 51 LTC 65.0% 52 Interest rate 5.0% 53 54 55 Stabilized NOI at openi 750,000 56 Comparable caprates 6.07 57 58 59 Mortgage loan: 60 61 Term (years) 62 Amortization period (ye 63 Mortgage rate 64 Maximum LTV 65 Minimum DSCR 66 5 20 4.07 75.0% 1.25