can you please help me understand where the loan repayment number in year 5 was calculated and the expected cash flow numbers came from please show calculation for those and for the discounted cf year 5.

also shouldnt there be a year 6 for this from what the question is asking ? please help me clear up the confusion

You have the opportunity to invest in an office building in downtown Tampa, in which you would purchase as a 5-year holding investment with a 12% required rate of return (discount rate). The building offers a total rentable area of 31,100 square feet, and 170 garage-parking spaces. You are provided the following information on the property from the current owner:

The owner is asking $11,500,000 for the building.

The owner has annual contracts from tenants on the building for 28,000 square feet of the total space at $24.00 psf, gross. Additionally, 153 parking spaces are leased by annual contract for $135.00 per month, per space. You expect this same office vacancy to occur into perpetuity, and expect parking vacancy to equally correlate with the office vacancy. These lease terms are found to be in line with the downtown office market.

Current annual operating expenses for the building follow:

Management Fees: 8% of EGI

Annual Real Estate Taxes: $9,500

Hazard Insurance: $7,500

Maintenance/Repairs: $22,000

Supplies $6,000

Capital Replacement Allowance: $13,000

Administrative Costs: $8,250

Operating Costs of the Garage: $9,800

Your mortgage lender has committed to you a loan to purchase the office building (should you decide to partake in the investment), which would offer the following terms:

Loan-to-Value: $6,825,000 Mtg; $4,675,000 hard equity

Interest Rate: 4.25% FRM

Loan Duration: 25 years, fully amortizing

Payment: $443,684 per annum

Prepayment Penalty: None

A study of the office building market in downtown Tampa indicates the following trended increases in incomes and expenses, which can safely be assumed in analysis forecasts:

Office rents: 3% per annum

Parking rents: 3% per annum

Real Estate Taxes: 3.5% per annum

Other Operating Expenses: 3.4% per annum

Based on the above information, prepare a reconstructed income and expense statement forecasting returns for the 5-year holding period (six years analysis required).

H, Prease find the calculation below based on the details given above Remarks Revenue Revenue from 672.000 212925 with 3mal increase. Annual Rent pers. It is 524 and bocopied is 2000 hence totalrent of S672000 En and later on with increase 6720001.03692160 for Year 2.692160-182712925 for You do with a crease. Rent per parking is $135 pm. for 153 parking spaces (occupied Hercentual figure is 247860 for Yearlic 11512153 Remaining sess with Increase is in the similar manos shown above Revenice from Campe-Parking Total Rem 247,860 919.860 255.25 947.456 262.955 975.879 270.543 1.005.156 278.000 1,035,JII Management focs 73.589 75,795 78,070 50,412 Annual Real Estate taxes 9.500 93 10 533 10,901 Lezardine 7.500 7.755 8019 R. 8.593 Maintenance Repairs 22.000 24,321 25,148 22.748 6.21 No animal incrcate since it is dicet cont of Total beve shown above. Terey for your lie 1960 % With 3.5 incase. 59500 kr Year 1. $9500 1035=59833 for Year 2 and $9833*1.035=510177 and so With 3.4% increase $7500 for Year I. $7500*1.0349755 for Year 2 and 57755 1.035-58019 band son with 3.4 annual increase. Similar cakulation as mentioned above with 2.4% annual increase. Similar cakulation as mentioned have with 3.4 tease. Similar calculation assistinct above with 3.4ual increase. Similar akustion as mentioned above with J.Sanal inercan. Similar calculation as mentioned blove Sun of all expenses 6.000 6.850 Supplies Capital Replacement Allowance 13.000 13.42 13.99 14.312 14.00 8.250 KSI XXI 9.120 9.431 Administratives Operating Cows of the Cartage Total expenses 10,133 10.534 9.500 149.6.39 10.478 159.399 11.200 Net Operating cashews 270.221 793.014 $16.450 0.639 865.511 Die w Tutal Revenue and Total expert Year Sinclades payment of balance principal of $5988769 Bwanee principal calculated basis simple amortsheet o repayment 445,684 443.684 6.432.453 lingended below Payment for poureriy faraly equity) 4,675.000 Receipt from selling of property 11,500,000 assuming that it is sold at same price Expected cashflow in Sum of Net operating cashflows, Loan repayment. Payment 4675,000 326,387 349,330 372,796 396.955 5.900.058 He acquiring property and Receiptivat selling of property Tiscented cashflow Forcach year formel for discounted cash flow is expected 412% 4,675,000 291,551 278.454 265,349 257.272 3.366.572 cashow..(+125 Year Net cashflow -220,767 Summation of Tinted cashews) Repayment schedule for calculation of balance principal In Year 5. Year Opening Principal Repayment Interest 8 4.25% on opening balance Principal payment Repayment less merest Closing Balance 6.825.000 443.684 290.1163 153.622 6671.370 160,130 2 3 + 5 6,671,379 6,511328 6,344.271 170,219 443684 441.684 443.686 443.64 283,334 276.727 249.632 252.214 6.511.22 6.344271 6.170,219 59,719 171053 11.450 H, Prease find the calculation below based on the details given above Remarks Revenue Revenue from 672.000 212925 with 3mal increase. Annual Rent pers. It is 524 and bocopied is 2000 hence totalrent of S672000 En and later on with increase 6720001.03692160 for Year 2.692160-182712925 for You do with a crease. Rent per parking is $135 pm. for 153 parking spaces (occupied Hercentual figure is 247860 for Yearlic 11512153 Remaining sess with Increase is in the similar manos shown above Revenice from Campe-Parking Total Rem 247,860 919.860 255.25 947.456 262.955 975.879 270.543 1.005.156 278.000 1,035,JII Management focs 73.589 75,795 78,070 50,412 Annual Real Estate taxes 9.500 93 10 533 10,901 Lezardine 7.500 7.755 8019 R. 8.593 Maintenance Repairs 22.000 24,321 25,148 22.748 6.21 No animal incrcate since it is dicet cont of Total beve shown above. Terey for your lie 1960 % With 3.5 incase. 59500 kr Year 1. $9500 1035=59833 for Year 2 and $9833*1.035=510177 and so With 3.4% increase $7500 for Year I. $7500*1.0349755 for Year 2 and 57755 1.035-58019 band son with 3.4 annual increase. Similar cakulation as mentioned above with 2.4% annual increase. Similar cakulation as mentioned have with 3.4 tease. Similar calculation assistinct above with 3.4ual increase. Similar akustion as mentioned above with J.Sanal inercan. Similar calculation as mentioned blove Sun of all expenses 6.000 6.850 Supplies Capital Replacement Allowance 13.000 13.42 13.99 14.312 14.00 8.250 KSI XXI 9.120 9.431 Administratives Operating Cows of the Cartage Total expenses 10,133 10.534 9.500 149.6.39 10.478 159.399 11.200 Net Operating cashews 270.221 793.014 $16.450 0.639 865.511 Die w Tutal Revenue and Total expert Year Sinclades payment of balance principal of $5988769 Bwanee principal calculated basis simple amortsheet o repayment 445,684 443.684 6.432.453 lingended below Payment for poureriy faraly equity) 4,675.000 Receipt from selling of property 11,500,000 assuming that it is sold at same price Expected cashflow in Sum of Net operating cashflows, Loan repayment. Payment 4675,000 326,387 349,330 372,796 396.955 5.900.058 He acquiring property and Receiptivat selling of property Tiscented cashflow Forcach year formel for discounted cash flow is expected 412% 4,675,000 291,551 278.454 265,349 257.272 3.366.572 cashow..(+125 Year Net cashflow -220,767 Summation of Tinted cashews) Repayment schedule for calculation of balance principal In Year 5. Year Opening Principal Repayment Interest 8 4.25% on opening balance Principal payment Repayment less merest Closing Balance 6.825.000 443.684 290.1163 153.622 6671.370 160,130 2 3 + 5 6,671,379 6,511328 6,344.271 170,219 443684 441.684 443.686 443.64 283,334 276.727 249.632 252.214 6.511.22 6.344271 6.170,219 59,719 171053 11.450