An office building has three floors of rentable space with a single tenant on each floor. The first floor Tenant A has 20,000 square feet of rentable space and is currently renting for $15 per square foot. The lease has an expense stop at $4 per square foot. The second floor has 15,000 square feet of rentable space and is leasing for $15.50 per square foot. This lease has an expense stop at $4.50 per square foot. The third floor has 15,000 square feet of leasable space and a lease was just signed for the next five years at a rental rate of $17 per square foot, which is the current market rate. The expense stop for this tenant is $5 per square foot, which is what the expenses are currently estimated to be during the first year of its lease (excluding management). Each lease also has a CPI adjustment that provides for the base rent to increase at half the increase (50%) in the CPI. The CPI is projected to be 3 percent per year. Management expenses are expected to be 5 percent of effective gross income and are not included in the expense stop. Estimated operating expenses, $5.00psf, for year 1 are included in the template. All expenses are projected to increase 3 percent per year. You have been offered to buy the building at a price of $5,000,000. You are also seeking financing to acquire the property. Assuming the price is the value, you can obtain financing up to 65% of the price at an interest rate of 8.5%, 30-year, monthly pay, fully amortizing with a ten year term. You anticipate selling the property on the last day of year 5 based on year 6s NOI capped at 11%. However, you will have to pay a prepayment premium of 5% of the outstanding balance at that time. There will also be selling expenses equal to 3% of the selling price. 1. Prepare a 6-year cash flow statement 2. What is the IRR without leverage? 3. What is the IRR with leverage? 4. Assuming you wish a return of 14%, what is the price that you would pay for the building?