Calculate the Leveraged IRR for the following investment in a fully occupied retail center. Make an Excel spreadsheet to complete this problem. (include step by step instructions of how to complete in excel correctly)

1. Retail center encompasses 75,000 square feet.
2. Cash available for partner distributions and debt payments per year = $8.00 per square foot. This amount is projected to grow at a rate of 2% per year.
3. Initial Investment = $6.0 million
4. Debt Financing = 55% of your initial investment
5. Debt interest rate is fixed at 8%
6. Debt is interest only for the first two years, then amortizes an a 25-year amortization schedule.
7. You analyze your investments assuming a 7-year hold.
8. You project cap rates for similar retail centers to be 6%. Assume this is your terminal cap rate.
9. Broker commission and other closing costs are estimated to be 2% of proceeds at time of sale.
10. Don't forget to pay off the loan in year 7.
11. If your investors expect a 15% IRR, would they be happy with this investment? What might you do to improve the returns? (Hint: Think about the capital stack.)