Q1 A)

Q1 B)

The year-1 NOI for an investment property is $403,000. Debt financing will be acquired based upon 1.2DCR calculated using year-1 NOI, a fixed interest rate of 6.35% per year, maturity of 20 years, and an amortization term of 10 years, with annual payments. You expect NOI to grow by 3% per year after the first year. You expect to hold the property for five years, intending to sell at the end of year- 5 for a value consistent with a terminal cap rate of 5% applied to year- 6NOI. If your required rate of return for this investment is 8%, what is the present value of your equity interest in the property if you were to acquire it at these terms (Hint: assume you purchase the property for an amount equal to the present value of property cash flow)? You operate a mall and have agreed to the following lease terms with one of your in-line tenants. The annual base rent is $32.58 per quare foot for the 8,000 square feet of rentable space. The lease contains a percentage rent clasue that stipulates the tenant must pay 2.8% of annual gross sales revenue above a breakeven sales level of $700,000. If the tenant produces sales of $1 million during the upcoming year, what will be the annual rent per square foot for this tenant? The year-1 NOI for an investment property is $403,000. Debt financing will be acquired based upon 1.2DCR calculated using year-1 NOI, a fixed interest rate of 6.35% per year, maturity of 20 years, and an amortization term of 10 years, with annual payments. You expect NOI to grow by 3% per year after the first year. You expect to hold the property for five years, intending to sell at the end of year- 5 for a value consistent with a terminal cap rate of 5% applied to year- 6NOI. If your required rate of return for this investment is 8%, what is the present value of your equity interest in the property if you were to acquire it at these terms (Hint: assume you purchase the property for an amount equal to the present value of property cash flow)? You operate a mall and have agreed to the following lease terms with one of your in-line tenants. The annual base rent is $32.58 per quare foot for the 8,000 square feet of rentable space. The lease contains a percentage rent clasue that stipulates the tenant must pay 2.8% of annual gross sales revenue above a breakeven sales level of $700,000. If the tenant produces sales of $1 million during the upcoming year, what will be the annual rent per square foot for this tenant