Please approach the following case study with a blank workbook and use formulas in Excel that would be used wherever $$ hard codes should not be put in$.$ The project is a speculative office development with two leases. The project features the following assumptions:

Project Timing

$1.$ Analysis Start: $12/31/22$

$2.$ Predevelopment: $12$ months

$3.$ Construction: $24$ months

$4.$ Lease $1$: Commencing $12$ months after delivery

$5.$ Lease $2$: Commencing $24$ months after delivery

$6.$ Sale Date: Month $72$ or $12/31/28$

Project Size:

$1.$ Project GSF: To be determined by applying efficiency below to NRSF

$2.$ Project NRSF: $190,000$ SF

$3.$ Project Efficiency: $95\%$

Development Assumptions

$1.$ Land Purchase Price: $$80/$ GSF to be spent at time zero

$2.$ Soft Costs: $$50/$ GSF to be spent $100\%$ during the predevelopment period

$3.$ Hard Costs: $$300/$ GSF

a$.1/3$ to be spent during the first year of construction

b$.2/3$ to be spent during the second year of construction

$4.$ Leasing Assumptions

a$.$ Tenant $1$

i$.$ Premises: $125,000$ NRSF

ii$.$ Rent: $$48/$ SF NNN

iii. Free Rent: $12$ months

iv$.$ Escalations: $2\mathrm{.}5\%$

v$.$ Term: $7$ years

vi$.$ Tenant Improvement Allowance: $$150/$ NRSF

$1.$ Paid $100\%$ in lease commencement year

vii. Leasing Commissions $6\%$

$1.$ Paid $100\%$ in lease commencement year

b$.$ Tenant $2$

i$.$ Premises: $65,000$ NRSF

ii$.$ Rent: $$60/$ SF NNN

iii. Free Rent: $12$ months

iv$.$ Escalations: $2\mathrm{.}5\%$

v$.$ Term: $10$ years

vi$.$ Tenant Improvement Allowance: $$180/$ NRSF

$1.$ Paid $100\%$ in lease commencement year

vii. Leasing Commissions $6\%$

$1.$ Paid $100\%$ in lease commencement year

Operating Assumptions: The numbers below should be reflected at delivery and escalate thereafter

$1.$ Opex: $$12/$ SF

$2.$ Real Estate Taxes: $$15/$ SF

$3.$ Escalation: $2\mathrm{.}5\%$

Sale Assumptions

$1.$ Residual Cap Rate: $5\mathrm{.}25\%$ to be applied to year $7$ NOI

$2.$ Sales Costs: $2\mathrm{.}00\%$

$3.$ Please display the following on a gross dollar and $ $/$ GSF basis:

a$.$ Gross Sales Proceeds

b$.$ Selling Costs

c$.$ Net Sale Proceeds

d$.$ Gross Sales Proceeds de$-$escalated to the commencement date at $2\mathrm{.}75\%$ growth rate

Financing Assumptions: Please assume a traditional bank construction loan for this project. That means equity up$-$front.

$1.$ Loan to Cost: $65\%$

$2.$ Interest Rate: $6\mathrm{.}00\%$

$3.$ Recordation Tax: $2\mathrm{.}50\%$

$4.$ Financing Fees: $1\mathrm{.}50\%$

Please include the following as part of your model:

$1.$ Sources and Uses Table

$2.$ Returns

a$.$ Unlevered IRR

b$.$ Levered IRR

c$.$ Equity Multiple

d$.$ Stabilized Yield

e$.$ Stabilized Cash on Cash

$3.$ Data Tables Measuring IRR at the following:

a$.$ Tenant $1$ rents $($$$1/$SF increments$)$ vs cap rates

b$.$ Land purchase price $($$$5/$ SF increments$)$ vs debt interest rate $(0\mathrm{.}25\%$ increments$)$

c$.$ Tenant $2$ rents $($$$2/$ SF increments$)$ vs TI$$s $($$$10/$ SF increments$)$

$4.$ Please build a waterfall reflecting the following:

a$.5\%$ GP Investment $/95\%$ LP Investment

b$.$ Pari Passu until a $8\%$ return

c$.20\%$ to the GP and $80\%$ to the LP until a $12\%$ return

d$.30\%$ to the GP and $70\%$ to the LP until a $15\%$ return

e$.40\%$ to the GP and $60\%$ to the LP thereafter