Please fill out spreadsheet with assumptions from below.

Link to Excel sheet on drive:

https://drive.google.com/file/d/1_8dgLnCXpJS2WpsttOdxlmPT0TwqHrYt/view?usp=sharing

No Name building Assumptions

• The building has 30,000 SF, divided into three (Space1, Space2, Space3) 10,000 /SF blocks
• Current market lease rates: $10/SF increasing 1% per year.
• Inflation rat is 2% per year.
• Space1

Lease signed two years ago at fixed $10.50/SF for 5 years

Has three years left in a 5-year lease

Yr 4: 50% probability of lease at market rent,

Yrs 5-8: fixed price at market rent of year 4

• Space2

Yrs 1 to 5 years: Today lease for 5 years at fixed market rent

Yr 6 : 50% probability of lease at market rent.

Yrs 7-10: use 6^th year fixed market rent, no price increases

Yr 11: return to market rent at 50% probability

• Space3

Yr 1: Currently vacant

Yr 2: Expected to lease at the beginning of year 2 at fixed market rent for 5 years

Yr 7: 50% probability of lease at market rent.

Yrs 8-11: Fixed market rent for 4 years (use 7^th year market rent)

• Other income: Begin with 30,000 and increases 1% per year.

• Expense Reimbursements (already given)
• Management fee: 3% of EGI
• Capital Expenditures

Include TIs, leasing commissions, general capital expenditures for common areas or structural improvements

TI expenditures and leasing commissions occur whenever a new lease is signed.

TI is $5/SF growing to $5.50/SF beginning Yr 6

Leasing commission is 3% of PGI

Year 5: $100,000 spending for common area improvement

• PBTCF(Property Before Tax Cash Flow)= NOI-Cap Exp
• PBTCF-Reversion(Property Before Tax Cash Flow-Reversion)=Cap rate*11^th year NOI. Cap rate =10
• =IRR(B46:L46) where line 46 = line

• Going-in and Going-out cap rates?

Property purchased for $2 million

Property sold for $2.282 million

B C D E F G H J K L M Year: 1 2 2 3 4 5 6 7 8 9 10 11 10 10.1 10.201 10.30301 10.40604 10.5101 10.6152 10.72135 10.82857 10.93685 11.04622 0 1833.333 2003.333 0 1650.768 964.3945 1117.739 2869.547 0 1822.581 328.7155 0 2944.444 3114.444 1813.944 3464.712 0 153.3446 1905.153 469.2957 2291.877 0 0 0 170 0 260.134 0 0 1751.808 315.9511 2138.532 644.6667 1 The Noname Building: Cash Flow Projection 2 3 Item: 4 Market Rent/SF: 5 Potential Revenue: 6 Gross Rent Space 1 (10000SF) 7 Gross Rent Space 2 (10000SF) Gross Rent Space 3 (10000SF) 9 Total PGI 10 Vacancy allowance: 11 Space 1 12 Space 2 13 Space 3 14 Total vacancy allowance 15 Total EGI 16 Other Income 17 Expense Reimbursements 18 Space 1 19 Space 2 20 Space 3 21 Total Revenue 22 Operating Expenses 23 Reimbursable expenses 24 Property Taxes 25 Insurance 26 Utilities 27 Total Reimbursable Expenses 28 Non-reimbursable expenses: 29 Management 30 Total Operating Expenses 31 32 NOI 33 34 Capital Expenditures 35 TI 36 Leasing Commissions 37 Common area physical improvements 38 39 Property Before-Tax Cash Flow (operations) 40 Property Before Tax Cash Flow (reversion) 41 42 IRR @ $2,000,000 price: 43 44 45 IRR @ $2,000,000 35000 5000 16666.67 56666.67 35000 5000 25500 65500 35000 5000 26010 66010 35000 5000 22108.5 62108.5 35000 36750 36750 36750 36750 36750 36750 5000 5250 5250 5250 5250 5250 5250 27060.8 23001.68 23461.72 28717.14 24409.57 29877.31 25395.72 67060.8 65001.68 65461.72 70717.14 66409.57 71877.31 67395.72 -2000000 B C D E F G H J K L M Year: 1 2 2 3 4 5 6 7 8 9 10 11 10 10.1 10.201 10.30301 10.40604 10.5101 10.6152 10.72135 10.82857 10.93685 11.04622 0 1833.333 2003.333 0 1650.768 964.3945 1117.739 2869.547 0 1822.581 328.7155 0 2944.444 3114.444 1813.944 3464.712 0 153.3446 1905.153 469.2957 2291.877 0 0 0 170 0 260.134 0 0 1751.808 315.9511 2138.532 644.6667 1 The Noname Building: Cash Flow Projection 2 3 Item: 4 Market Rent/SF: 5 Potential Revenue: 6 Gross Rent Space 1 (10000SF) 7 Gross Rent Space 2 (10000SF) Gross Rent Space 3 (10000SF) 9 Total PGI 10 Vacancy allowance: 11 Space 1 12 Space 2 13 Space 3 14 Total vacancy allowance 15 Total EGI 16 Other Income 17 Expense Reimbursements 18 Space 1 19 Space 2 20 Space 3 21 Total Revenue 22 Operating Expenses 23 Reimbursable expenses 24 Property Taxes 25 Insurance 26 Utilities 27 Total Reimbursable Expenses 28 Non-reimbursable expenses: 29 Management 30 Total Operating Expenses 31 32 NOI 33 34 Capital Expenditures 35 TI 36 Leasing Commissions 37 Common area physical improvements 38 39 Property Before-Tax Cash Flow (operations) 40 Property Before Tax Cash Flow (reversion) 41 42 IRR @ $2,000,000 price: 43 44 45 IRR @ $2,000,000 35000 5000 16666.67 56666.67 35000 5000 25500 65500 35000 5000 26010 66010 35000 5000 22108.5 62108.5 35000 36750 36750 36750 36750 36750 36750 5000 5250 5250 5250 5250 5250 5250 27060.8 23001.68 23461.72 28717.14 24409.57 29877.31 25395.72 67060.8 65001.68 65461.72 70717.14 66409.57 71877.31 67395.72 -2000000