Over the past 7 years, you have developed 12 build to suit facilities for convenient marts. The facilities are roughly 11,000sf and completely occupied by a convenient store. The lease term on these deals as follow: -10 year lease term -triple rent -the rent provided 450 basis point spread over 10 years treasury rate -the 10 units sold within 18 months has a spread over 10 yr treasury over 350 basis points. -the unsold units are expected to sell spread of 300 basis points over 10 yr treasury -10 year renewal option -convenient marts may purchase the properties at fair market value -an option to purchase the property in year 10 at 10% discount to fair market value You have sold 10 of 12 convenient mart stores you have developed. Someone asked you to develop a new site in a 10,000sf facility. the deal as follow: -10 yr lease -10 yr renewal option -option to purchase at fair market value -option to purchase in yr 10 at 10% discount to fair market value -triple net rent lease -rent for the first 10 yrs is $50,000 annually -rent during option yeras would be $65,000 anually - certificate of occupancy must be in place within 13 months, if not the rent will reduce to $45,000 anually during the first 10 years - if certificate of occupancy is not in place within 14 months, convenient mart is released from the lease and you must pay them penalty of $60,000 cost associated with the project: soft cost $50,000, hard cost $400,000, land $120,000 you have a term sheet loan which provides 3 yr financing of $440,000 at LIBOR plus 300 basis point. LIBOR is currently 1.4%. The loan adjust interest loan quarterly. The loan has no amortization (interest only loan). You will also receive development fee of 5% of hard cost plus approval, planning and design cost. If needed, the equity of this project is available, but would absorb 30% of your equity capacity. Should you take this project? Include best case, worst case, and most likely scenario return. Feel free to make any assumptions necessary, but it has to be disclosed.

Also feel free to get rid any information that unnecessary. Will be really grateful for your help!!!!