PLEASE DO IN EXCEL WITH CALCULATIONS AND WORK SHOWN.

Chapter 2016%20Problems 2015).pdf + E A Read aloud Draw V Highlight HT consider'? The CEO of Kuehner Development Co, has just come from a meeting with his marketing staff where he was given the latest market study of a proposed new shopping center, Parker Road Plaza. The study calls for a construction phase of one year and an operation phase of five years The property is to be sold at the end of the fifth year of operation Part 1. Construction Phase The marketing staff has chosen a 12-acre site for the project that they believe they can acquire for $2.25 million. The initial studies indicate that this shopping center will support a floor to-area ratio of 36.35 percent and a 92.11 percent leasable area ratio. This means that the gross building area (GBA) will be 190,000 sq., and the gross lensable area (GLA) will be 175.000 sq.ft The head of Kuchner's construction division assures the CEO that construction can keep hand costs to $54 per square foot (GRA) and softcoils excluding interest carry and all loan fees) to $4.50 per square foot (GRA). The division has decided to subcontract all of the site improve ments at a total cost of $750,00) The Shawmut Bank has agreed to provide interim financing for the project. The bank will finance all of the construction costs and site improvements at an annual rate of 13 percent plus loan commitment fee of two points. The construction division estimates that 60 percent of the total direct cos will be taken down evenly during the first six months of the construction phase. Kuchner expects to obtain permanent financing from the Acne Insurance Co. at an interest rate of 12 percent for 20 years with a 25 percent prepaid loan fee and a 10-year call Kuchner in expected to make monthly loan payments #. What will be the otil project cost for Parker Road Plaza (excluding loun commitment fees and interest carry)? What will be the total direct cost? What will be the interest carry for the Parker Road Plaza project? What will be the total loan amount that Kuehner must borrow (including interest carry What will be the yield to the lender on this construction an What is the total project cost and how much quity must be put into the project each year during the construction phase? (Kuchner will find both loan commitment fees from project equity DAI ARead aloud y Draw Highlight Part II. Operations and Final Sale Phare: Kuehner estimates that it can lease Parker Road Plaza for $18.50 per square foot (GLA) hase rent with a 3 percent overage on gross sales in excess of $200 per square foot (GLA). The Chapter 16 Firmeny Pre Developer 559 company expects rets to increase by 5 percent per year during the lease period and tenant reimbursements to run S8 per square foot (GLA) and to increase at the same rate as Tents Kuchner expects to have the shopping center 70 percent leased during the first year of operation After that, vacancies should average about 5 percent per year. The vacancy losses should be cal culated on the entire gross potential income, which includes minimum rent percentagerens and tenant reimbursements, Sales, which are expected to avruge 5210 per square foot (GLA) for the first year of operation, should grow at 6 percent per year. The printing expenses are expected to uverage S14 per square foot of GLA for the first year and will increase at the same rate as the rents, Kuehner will collect an additional percent of Elus an annual management fee. The foal sales price is expected to be $18.4 million und Kuchner will incur sales expenses of 2 percent Two schedules provide necessary information about this phase of the project 1) the gross potential income of Parker Road Man for the five-year operation period and (2) the schedule of motivation and depreciation expenses for the project a 95 it 9 Chapter 16 Problem (5pct X + oads/Chapter%2016%20Problems%2045).pdf + A Read aloud Draw Highlight of 2 percent. The schedules provide necessary information about this phase of the project (1) the gross potential income of Parker Road Plura for the five-year operation period and (2) the schedule of amortization and depreciation expenses for the project d. What cash flows would Kuchner Development Co. ear before and after taxes for Parker Road Plaa if it were operated for five years assuming the marginal tax rate to be 28 for ordinary income and capital gains? What cash flows will Kucher realine before and after tates from the sale of the project after five years! Assuming that kuchner's before-tax required me of return is 16 percent should the company develop Puker Road Plaza Justify your answer based on BTNPV and BTIRR Pro Forma Operating Statement-Parker Road Plaza Cash Flows (End of Year 2 3 4 5 6 Income Minimum fent 53,237.500 $3,299,375 $3,569 344 $3.747,811 $3.935,201 Overage of gross sales $2.500 118.650 188,769 263,095 341,681 Tenant reimbursements per GLA) 1.400,000 1,470,000 1,543.500 1,620,675 1,701,709 Potential gross income 54690,000 $4,986,025 $5,201,613 55.631,581 $5,978,791 Hem Construction loan fees Permanent loan fees Amortization Period 1 year 10 years Capital improvements 90% of total Tenant improvements (on of total Depreciation Period 31.5 years SIL 7 youts DDB CH a $ Chapter 2016%20Problems 2015).pdf + E A Read aloud Draw V Highlight HT consider'? The CEO of Kuehner Development Co, has just come from a meeting with his marketing staff where he was given the latest market study of a proposed new shopping center, Parker Road Plaza. The study calls for a construction phase of one year and an operation phase of five years The property is to be sold at the end of the fifth year of operation Part 1. Construction Phase The marketing staff has chosen a 12-acre site for the project that they believe they can acquire for $2.25 million. The initial studies indicate that this shopping center will support a floor to-area ratio of 36.35 percent and a 92.11 percent leasable area ratio. This means that the gross building area (GBA) will be 190,000 sq., and the gross lensable area (GLA) will be 175.000 sq.ft The head of Kuchner's construction division assures the CEO that construction can keep hand costs to $54 per square foot (GRA) and softcoils excluding interest carry and all loan fees) to $4.50 per square foot (GRA). The division has decided to subcontract all of the site improve ments at a total cost of $750,00) The Shawmut Bank has agreed to provide interim financing for the project. The bank will finance all of the construction costs and site improvements at an annual rate of 13 percent plus loan commitment fee of two points. The construction division estimates that 60 percent of the total direct cos will be taken down evenly during the first six months of the construction phase. Kuchner expects to obtain permanent financing from the Acne Insurance Co. at an interest rate of 12 percent for 20 years with a 25 percent prepaid loan fee and a 10-year call Kuchner in expected to make monthly loan payments #. What will be the otil project cost for Parker Road Plaza (excluding loun commitment fees and interest carry)? What will be the total direct cost? What will be the interest carry for the Parker Road Plaza project? What will be the total loan amount that Kuehner must borrow (including interest carry What will be the yield to the lender on this construction an What is the total project cost and how much quity must be put into the project each year during the construction phase? (Kuchner will find both loan commitment fees from project equity DAI ARead aloud y Draw Highlight Part II. Operations and Final Sale Phare: Kuehner estimates that it can lease Parker Road Plaza for $18.50 per square foot (GLA) hase rent with a 3 percent overage on gross sales in excess of $200 per square foot (GLA). The Chapter 16 Firmeny Pre Developer 559 company expects rets to increase by 5 percent per year during the lease period and tenant reimbursements to run S8 per square foot (GLA) and to increase at the same rate as Tents Kuchner expects to have the shopping center 70 percent leased during the first year of operation After that, vacancies should average about 5 percent per year. The vacancy losses should be cal culated on the entire gross potential income, which includes minimum rent percentagerens and tenant reimbursements, Sales, which are expected to avruge 5210 per square foot (GLA) for the first year of operation, should grow at 6 percent per year. The printing expenses are expected to uverage S14 per square foot of GLA for the first year and will increase at the same rate as the rents, Kuehner will collect an additional percent of Elus an annual management fee. The foal sales price is expected to be $18.4 million und Kuchner will incur sales expenses of 2 percent Two schedules provide necessary information about this phase of the project 1) the gross potential income of Parker Road Man for the five-year operation period and (2) the schedule of motivation and depreciation expenses for the project a 95 it 9 Chapter 16 Problem (5pct X + oads/Chapter%2016%20Problems%2045).pdf + A Read aloud Draw Highlight of 2 percent. The schedules provide necessary information about this phase of the project (1) the gross potential income of Parker Road Plura for the five-year operation period and (2) the schedule of amortization and depreciation expenses for the project d. What cash flows would Kuchner Development Co. ear before and after taxes for Parker Road Plaa if it were operated for five years assuming the marginal tax rate to be 28 for ordinary income and capital gains? What cash flows will Kucher realine before and after tates from the sale of the project after five years! Assuming that kuchner's before-tax required me of return is 16 percent should the company develop Puker Road Plaza Justify your answer based on BTNPV and BTIRR Pro Forma Operating Statement-Parker Road Plaza Cash Flows (End of Year 2 3 4 5 6 Income Minimum fent 53,237.500 $3,299,375 $3,569 344 $3.747,811 $3.935,201 Overage of gross sales $2.500 118.650 188,769 263,095 341,681 Tenant reimbursements per GLA) 1.400,000 1,470,000 1,543.500 1,620,675 1,701,709 Potential gross income 54690,000 $4,986,025 $5,201,613 55.631,581 $5,978,791 Hem Construction loan fees Permanent loan fees Amortization Period 1 year 10 years Capital improvements 90% of total Tenant improvements (on of total Depreciation Period 31.5 years SIL 7 youts DDB CH a $