Property #3 Property type = 3-story office building Location = Lexington, MA Year Built = 2007 Property Size = 75,000 sq feet Current Annual Rent / SF = $0/sf (building currently vacant) Renovation: 12-month conversion from conventional office to biotech office Current vacancy = 100% Renovation and TI costs = $200 / SF, spent in year 1 after purchase Pro-forma rent=your assumption, based on market research Vacancy projection: 100% vacant year 1; 7% vacant years 2-6 Annual Rent Escalation = 3% / year after renovation Operating expenses & taxes= $10/SF, increasing 3% per year Terminal cap rate= 7.0% Discount rate= 8.50% Purchase price based on two different methods (1 slide) a. Direct cap rate of the 12 month pro-forma NOI, based on your research about prevailing cap rates for your property type b. Present value of discounted projected cash flows and terminal value, assuming sale at end of year 5 on pro-forma year 6 NOI Property #3 Property type = 3-story office building Location = Lexington, MA Year Built = 2007 Property Size = 75,000 sq feet Current Annual Rent / SF = $0/sf (building currently vacant) Renovation: 12-month conversion from conventional office to biotech office Current vacancy = 100% Renovation and TI costs = $200 / SF, spent in year 1 after purchase Pro-forma rent=your assumption, based on market research Vacancy projection: 100% vacant year 1; 7% vacant years 2-6 Annual Rent Escalation = 3% / year after renovation Operating expenses & taxes= $10/SF, increasing 3% per year Terminal cap rate= 7.0% Discount rate= 8.50% Purchase price based on two different methods (1 slide) a. Direct cap rate of the 12 month pro-forma NOI, based on your research about prevailing cap rates for your property type b. Present value of discounted projected cash flows and terminal value, assuming sale at end of year 5 on pro-forma year 6 NOI