Based on the given information, project the cash flows in Excel for the Maxwell Medical Center for a 5-year holding period. You can work either individually or in pairs. Your solutions are due by the beginning of class on Monday, 11/18. A template for the projections and data sheet containing the relevant parameters and information are provided in the file MaxwellPlaza_Blank.xslx.
Remember, the sale price is estimated by applying a cap rate to NOI in year 6, so you will have to extend your projections of NOI to 6 years. Other cash flows can be limited to 5.
1.CFs to Project: NOI, CF before DS, BTCF
Maxwell Plaza 6,900,000.00 11.00% General data: Price Required return (unlevered) Property type Rentable SF Number of tenants 11% Office 32,000 32,000.00 Lease reneval: Renewal probability Months vacant Lease term Tenant improvements - New Tenant improvements - Renewal Leasing commisions - New Leasing commisions - Renewal Reserves 80% 5 months 5 years $10/st $5/5f 20% of base rent in initial year 10% of base rent in initial year 0.30/st 80.00% 5.00 5.00 10.00 Inflation 5.00 20.00% 10.00% 0.30 Inflation 22.00/SF Market and economic data: Market rent Market inflation Expensergeneral inflation 22.00 3.00% 3.00% 3% Disposition: Market capitalization rate Sale commissions Legal 6.50% 2% of sale price Income: Squll Pharmaceuticals 6.50% 2.00% 25,750 14,500 21.28/st 2 50% 5.00/st 3 years 14,500.00 21.28 2.50% Rent (as of 1/2020) Rent escalation Expense stop Remaining lease term Note: 100% renew at Market Rent Trepanation Inst. 6.50 Mortgage financing: Principal amount borrowed Interest rate Amortization period $4.4M 5.75% 30 years 4,400,000.00 5.75% 30.00 5.00 Maturity Payment frequency Origination fee 5 years Annual 1.5% of initial balance 1.50% Rent (as of 172020) Rent escalation Expense stop Remaining lease term Phibes Medical Group 9.500 20.46/st 2.50% 4.50/st 2 years 9,500.00 20.46 2.50% 6.00 8,000 21.00 2.50% TBD 5 years 8,000.00 21.00 2.50% Base rent Rent escalation Expense stop Remaining lease term Ancillary Parking, 90,000/yr 90,000.00 Inflation Reimbursements Base stop 95/st. 2.407sf, 25% fixed 095 2.40 Inflation 0.25 Operating expenses: CAM Janitorial % fixed Real estate taxes Insurance Repairs & Maintenance Management (Non-reimbursable) 85,000 29,500 26,280 27 of EGI 85,000.00 Inflation 29,500.00 Inflation 26,280.00 Inflation 2% Data NOI CF before DS BTCF Maxwell Plaza 6,900,000.00 11.00% General data: Price Required return (unlevered) Property type Rentable SF Number of tenants 11% Office 32,000 32,000.00 Lease reneval: Renewal probability Months vacant Lease term Tenant improvements - New Tenant improvements - Renewal Leasing commisions - New Leasing commisions - Renewal Reserves 80% 5 months 5 years $10/st $5/5f 20% of base rent in initial year 10% of base rent in initial year 0.30/st 80.00% 5.00 5.00 10.00 Inflation 5.00 20.00% 10.00% 0.30 Inflation 22.00/SF Market and economic data: Market rent Market inflation Expensergeneral inflation 22.00 3.00% 3.00% 3% Disposition: Market capitalization rate Sale commissions Legal 6.50% 2% of sale price Income: Squll Pharmaceuticals 6.50% 2.00% 25,750 14,500 21.28/st 2 50% 5.00/st 3 years 14,500.00 21.28 2.50% Rent (as of 1/2020) Rent escalation Expense stop Remaining lease term Note: 100% renew at Market Rent Trepanation Inst. 6.50 Mortgage financing: Principal amount borrowed Interest rate Amortization period $4.4M 5.75% 30 years 4,400,000.00 5.75% 30.00 5.00 Maturity Payment frequency Origination fee 5 years Annual 1.5% of initial balance 1.50% Rent (as of 172020) Rent escalation Expense stop Remaining lease term Phibes Medical Group 9.500 20.46/st 2.50% 4.50/st 2 years 9,500.00 20.46 2.50% 6.00 8,000 21.00 2.50% TBD 5 years 8,000.00 21.00 2.50% Base rent Rent escalation Expense stop Remaining lease term Ancillary Parking, 90,000/yr 90,000.00 Inflation Reimbursements Base stop 95/st. 2.407sf, 25% fixed 095 2.40 Inflation 0.25 Operating expenses: CAM Janitorial % fixed Real estate taxes Insurance Repairs & Maintenance Management (Non-reimbursable) 85,000 29,500 26,280 27 of EGI 85,000.00 Inflation 29,500.00 Inflation 26,280.00 Inflation 2% Data NOI CF before DS BTCF
