Produce the Net Operating Income (NOI)

Please show work in excel with formulas

Youre considering investing in the following warehouse building, with the transaction expected to close on 1 January 2022.

Purchase Price (including costs)	$494,700
Holding Period	10 Years
Estimated Selling Price in Yr. 10	$544,000
Selling costs	4% of estimated selling price
Marginal Tax Rate	32%
Depreciation Schedule	39 years (improvements only)
Land-to-Value Ratio	30%
Capital Expense Reserves	4.0% of NOI annually
Opportunity cost of capital (r)	7.30% (on equity after tax)

Financing terms:10-year loan, 61% Loan-To-Value limit @ 4.20% interest per year. Payments made annually at the end of each year based on full amortization over 35 years.

The building is currently occupied by a single tenant, Amazon, which uses the space as a local distribution center. Amazons lease has five years to run and has a fixed $34,630 annual rent per year (assume its paid at the end of each year, to match loan and rent payments). The rent is Triple Net, with Amazon paying all recoverable operating expenses.

Amazons rent remains flat for the remainder of its term. The lease is expiring on 31 December 2023 (End of Year 2). The plan is to renew Amazons lease at prevailing market rent at the time of expiry. A real estate agent who tracks the market in this area estimates that demand for this space will remain high despite an increase of new supply. Her estimate of Year 3 market rent is $35,100 per year. She thinks that Amazon is likely to accept this rent if the lease is 10 years Triple Net, flat rent for the first 5 years, then an 8% increase in year 6 of the lease (which is the same as Year 8 of the investment), with rent remaining flat after that single increase for the remainder of the lease term. The tenant will likely demand a $7,000 improvement allowance from you in Year 3 to make some minor renovations.