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I recently applied for a financial analyst position at a Real Estate Firm. and I received an assignment to complete within 2 days to qualify
I recently applied for a financial analyst position at a Real Estate Firm. and I received an assignment to complete within days to qualify for the next process. Model Assignment:
Ridge Business Center
Ridge Business Center is a warehouseoffice property in Charlotte. The property includes a wellmaintained building totalling sq ft in leasable area.
The property has been offered for sale by the current owner at asking price of $ Million. As a Financial Analyst of XYZ Investors, you are expected to identify if the property will
be a good acquisition for the company. An investment must generate a minimum of IRR for XYZ Investors.
Please build a financial model using the assumptions below to provide an answer to the Management. Required sheets have been provided.
Investment Assumptions
Acquisition Date Jan
Holding Period : yearstime for which the property is owned
Sale Date: last day of th month
Terminal Cap Rate : This rate is used to determine Sale Price by the following formula: Sale Priceth Year NOITerminal Cap Rate
Cost of Sale: of Sale Earnings go to brokerlawyer
Loan Assumptions
Loan Start DateJan
Term of Loan years
LTV : of Price
Interest Rate
Loan Fees
Amortization Period years Calculate monthly loan payments, you will need an amortization schedule
Rent Assumptions
Assume rents increase every year on first day of the calendar year
Rents shown are Annual rents on a per square feet basis. Convert them to monthly rents and actual $ as and when required.
NNN leases are triple net leases, tenant has to pay their proportionate share of CAM, taxes and insurance over and above the rent
Consider Suite as vacant for the entire duration of years
Rent Roll As of July,
SuiteLeased AreaStatusLease Start DateLease End DateAnnual Rent PSFRent Increase DateRent IncreaseLease Type
sq ftmmddyymmddyyas of July, mmddyyAnnual
Occupied$NNN
Occupied$NNN
Occupied$NNN
Occupied$NNN
Occupied$NNN
Vacant
Total $
Expense Assumptions
All expenses are paid by landlord
All expenses grow annually
Expense Assumptions
Expense TypeAnnual Expense $
CAM $
Taxes$
Insurance$
Utilities$
Repairs$
Total$
Capital Expenditure
YearAnnual Amount
$ psf
$
$
$
$
$
Please refer to the excel sheet for the case study Ridge Business Center. Use functions of Excel wherever necessary, no macros should be used for the case study. Calculate Levered IRR on the investment using the data provided.
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