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Mortgage Finance Exercise Property NOI from a suburban office building is expected to be S8m per annum rising 3% per annum over the next 10

Mortgage Finance Exercise

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Property NOI from a suburban office building is expected to be S8m per annum rising 3% per annum over the next 10 years. Assume 5% of NOI for management fees and reserves. The ten year treasury is 5.0% Assume the "going in" cap rate is 7%. Calculate the Fair Market Value of the property. Maximum Loan to Value (LTV) is 60%. Does this change the amount that you can borrow? If so by how much

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