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Complete this Question within 2 hours. I need very urgent. You are offered the opportunity to develop a ii DUI] sf warehouse facility for General

Complete this Question within 2 hours. I need very urgent.

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You are offered the opportunity to develop a ii DUI] sf warehouse facility for General Foods in suburban Philadelphia. Attracted by your expertise as a local warehouse developer, General Foods has offered to sign a triple net lease for seven years at a rent for $2 million per year. They aiso insist that at the end of the seven-year lease term they have the option to purchase the property at SEE million. Their nal major condition is that the project be completed and ready for occupancy in 11months. If 'rt is not complete by that time, the deal is void. You estimate that the property will cost $20 million to complete [including all cosE] and that you should be able to complete it in ten months if you commence construction immediately. You believe that you can obtain a construction cost guarantee that guarantees cost. will not exceed $23.5 million. You believe that you will be able to obtain a $15 million, 25year amortization loan [with a sevenyear balloon], at a fixed interest rate of 4%, and a 5i] basis point fee {loan pointsl.You believe that you can close this loan within three weeks from now. You believe that your company can access up to approximately $3 million in equity, assuming that you can sucoessfully tap into appreciated equity positions in three existing properties without triggering capital gains taxes on these positions. Your company will receive a development fee of roughly 3% of project costs [this cost is included in your $33 million cost estimate]. Finally, vacancy rates in the market are approximately 4%, gross rent. in the market run $1113 per square foot, with operating expenses and taxes running ll$4 per square foot. Negotiations are over and it is time to make a decision. Please provide the following: it Pro-formaflnvestment Analysis I A] include: Ir Explain the rial: and opportunities for the potential investment {is it a {god or bad deal and state the pro: and oonsl 1' Partitioned IRE Growth model calculations Property 1Falue Reversion Year 3' Going-in Cap Rate investmenthevelopment

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