Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help provide the formulas needed to solve the yellow boxes. Thank you! for each year is noted. begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} hline & multirow{2}{*}{begin{tabular}{c} NOI Escalation

image text in transcribed

image text in transcribedPlease help provide the formulas needed to solve the yellow boxes. Thank you!

for each year is noted. \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|} \hline & \multirow{2}{*}{\begin{tabular}{c} NOI Escalation \\ Year 0 \end{tabular}} & \multirow{2}{*}{\begin{tabular}{l} 4.00% \\ \\ \end{tabular}} & \multirow[b]{2}{*}{ Year 2} & & \multirow[b]{2}{*}{ Year 4} & \multirow[b]{2}{*}{ Year 5} & \multirow[b]{2}{*}{ Year 6} & \multirow[b]{2}{*}{ Year 7} & \multirow{3}{*}{\begin{tabular}{l} Year 8 \\ 157,912 \end{tabular}} \\ \hline & & & & Year 3 & & & & & \\ \hline NOI & & 120,000 & 124,800 & 129,792 & 134,984 & 140,383 & 145,998 & 151,838 & \\ \hline Property Transactions & (1,500,000) & & & & & & & 1,800,000 & \\ \hline & (1,500,000) & 120,000 & 124,800 & 129,792 & 134,984 & 140,383 & 145,998 & 1,951,838 & \\ \hline \end{tabular} 1. What is the IRR for these cash flows if you sell the property in year 7 ? IRR 10.93% 2. What is the going-in cap rate? Going in Cap rate 8.00% 3. What is the going-out cap rate? Going out Cap rate 8.77% 4. If you decided to sell the building at the end of year 3 with an expected cap rate of 7.5%. What is the reversion value? (Sale price before fees) Cap Rate 7.50% Reversion Value $1,799,787 conditions, what is the most you should offer for the building? end of year two. What is your IRR? Cap Rate \begin{tabular}{|c|c|c|c|c|c|c|c|c|} \hline & \multicolumn{2}{|c|}{ Year 0} & \multicolumn{2}{|c|}{ Year 1} & \multicolumn{2}{|c|}{ Year 2} & \multicolumn{2}{|c|}{ Year 3} \\ \hline 5% & $ & - & $ & 120,000 & $ & 124,800 & $ & 129,792 \\ \hline & $ & (1,500,000) & $ & - & $ & 2,595,840 & & \\ \hline & $ & (1,500,000) & $ & 120,000 & $ & 2,720,640 & & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|c|} \hline \multirow{2}{*}{ Cap Rate } & \multirow[b]{2}{*}{ Year 0} & \multirow[b]{2}{*}{ Year 1} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 2}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 3}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 4}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 5}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 6}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 7}} & \multirow{2}{*}{\multicolumn{2}{|c|}{ Year 8}} \\ \hline & & & & & & & & & & & & & & & & \\ \hline NOI & $ & 120,000 & $ & 124,800 & $ & 129,792 & $ & 134,984 & $ & 140,383 & $ & 145,998 & $ & 151,838 & $ & 157,912 \\ \hline \multirow{7}{*}{SaleandPurchaseofProperty} & (1,500,000) & $ & $ & - & $ & - & $ & - & $ & - & $ & - & $ & 2,255,886 & $ & - \\ \hline & (1,500,000) & 120,000 & $ & 124,800 & $ & 129,792 & $ & 134,984 & $ & 140,383 & $ & 145,998 & $ & 2,407,724 & & \\ \hline & IRR & 13.60% & & & & & & & & & & & & & & \\ \hline & Unlevered IF & RR & & & & & & & & & & & & & & \\ \hline & & & Ex & ate & & & & & & & & & & & & \\ \hline & & & & 6.00% & & 7.00% & & 8.00% & & 9.00% & & 10.00% & & & & \\ \hline & & 13.60% & & 15.53% & & 13.60% & & 12.00% & & 10.64% & & 9.47% & & & & \\ \hline \end{tabular} NOI via Utility escalation. We want to know the impact of changes to Annual Rental Appreciation Rate by 1% increments and changes to Utility Escalation by 1% increments. Please submit the highlighted squares. 9. What is the NOI in year 5 ? 10. What is the IRR for this project

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Quantitative Trading

Authors: Ernest P. Chan

2nd Edition

1119800064, 978-1119800064

More Books

Students also viewed these Finance questions

Question

15.7 Explain the six steps in the termination interview

Answered: 1 week ago

Question

15.1 Define employee relations and employee engagement.

Answered: 1 week ago