Original Lease Term }= { 15 Years }. Commencement Date }={ January 31, 2006 }. Lease Expiration }= { August 31, 2031 } {Term Remaining }= 6.5+ t{ Years* }. Increases }= { 5% Each Option}. Purchase Price }= $ 1,900,000 { Cap Rate }= 6.14 %. { Net Operating Income } =$ 116,715. { Price / SF }=$ 280.07 { Rent / SF }=$ 17,20 

The loan officer examines the rent schedule and notices that the rent is guaranteed un the end of August 2031. She is offering you to use the entire rent amount during the guaranteed rent period to p off the loan. In other words, the bank will collect the entire rent payment during the guaranteed period (you get zero income). The loan is fully amortized over the loan term (i.e., the balance is $0 at the end of the term). The interest rate on the loan is 5.1%. What maximum amount would the bank be willing to lend you under these conditions? HINT: Set up the cash flow schedule and amortization table. Then, vary the loan amount until it is fully amortized over the life of the loan. Check the LTV of each loan amount to ensure you are using the correct interest rate.