Scenatio & Property Description Fin 40710/Prospective bigpluwer Excel Valuation Modeling Exerclsc A big boxindustnal building (the Property tutaling 354,255 SF ocated in a Salt Lake City, UT was purch sed this xocaing foc $19,500,000. A Principal at your prospective employer kas iready found soneoe that is i buying the Pruprty faMV FMV that yu thikly PIASRC pruvide a lu year annual DGP valuaton model of thtollowing otatiu for tie purpoesc of a hold/vell analysis. Piease use hesuptions in the table foand belo. iin ay assumptions you aeed. assumptois aema that e listl t: ehar, p riefy dei In lditon, write a brfsumrnary, no more than a few pphs, denyour hold/sell recomendation, the investment, andy impottant paints. Please be concise. Assame that "senior ranagewill be eviewing and bsing heis decsiors on what yuu bave producod represents the property. Hint Do notassme the puchase pice is an indicatioa of FNMV Tb Pr party 2010 vintag , 32. ccar ticagit crues docked facility locate 1m tnv huart of the Salt iak City's main industrial corridor. The Property is 70.1% eased to two cenants, 2 Local manafacturer ("Tenant A') and a glehsl supply chai mariagement oompanyTensnt HTh thi un is vacant. Tenant A's 136373 SP lease expires in May 34 Teat s 113,000 SF kase expires in October 2020 Leases are structured as each tenan its share of opersting expenses. Thereis in Sakai sn excel file wich an inecmplete eash few atatement from the Angus sofrware aysiem and a complete rent roll (ecall that the l is a socthin of lease abstract that provides the impottant coatLectuaeeners of tenant ents), create valaton spreadsheet as a separate sheet in this tue. ( of extra Feel feee to build the model out as you see fit and ceate sny schedale tabs that you feel are ecessary NOTE: Build a Dexible rodel that can be used to evaluate different economic scenatios. I particular, create nput cells where current ratket ent, discount eate, and termical cap rate are stored, and referencose cs in your model so that yg valuatio asuiptikily. Vacancy& 5.0% and 1% General Inflation: 0% 3,0% Management Fee as % of Cap Ex Reserve: Market Tem (ears Yoa wil also need a atrategy for reaching stabiliain I would create a space sbsorption pan that is easily mexdifsd withir theodel ini order to dositivity aalyxis 0.10/SP t Rental Rate $0.357 mcath Please be sare to shoxx the folowing Renewal Prohabilitv: IRR based on tbe 519,50,000 purchase price levero and evere (that is, oace based o asset cash flow and apaia based on equiry cash low, thas yoa will aeed debt cash Bo.) Equity multiple cachpTxl Cash on cash en ech petiod e market assunmptions 6-months 6,0% of tet rent on now, and 1crewaB $1.00/SI on aew lases. $0.50/ST oa Lease-up Time: sing Commissions Tenunt Imiprovements: lleases iscnunt Rate: Terminal Cap Rate: This exercise may be done in groups of up to 3. Note, however, everyone needs to participae questiuns frum this exercise are likely to be asked on the tinal. ebt Terma erest Rate an Term: 65M Life of loan Amort Schedule Notes: ) Gross rent is rentcost secoveries (if any). Net rent is base rentonl Ca a . nacrve . 15 an arm ualtzed cotitrate of cap cx expense Operating oost estimates can b" fuund m the attached speadsheet.) Lesse eommissioens st chatge anat aa rens over the life of the new lease. 4 Generl vacancy is wat we've been calling make vacancy-itablized vacancy. 5 General inflaioais an entry is Argas that is used to inlate matket cent rates, costs, etc,ualess vrwrittan t th "lin ite kvel. Aua that t isoterwritt tatarkrt rents, operating costs, and cap ex inflate at 2%/yr Management fees are zein Durable operating costs under NNN lessea. Do not inlae TI 5) Lease-up time is the trne it takes to create a new ase under tbe ew tt scenatio Scenatio & Property Description Fin 40710/Prospective bigpluwer Excel Valuation Modeling Exerclsc A big boxindustnal building (the Property tutaling 354,255 SF ocated in a Salt Lake City, UT was purch sed this xocaing foc $19,500,000. A Principal at your prospective employer kas iready found soneoe that is i buying the Pruprty faMV FMV that yu thikly PIASRC pruvide a lu year annual DGP valuaton model of thtollowing otatiu for tie purpoesc of a hold/vell analysis. Piease use hesuptions in the table foand belo. iin ay assumptions you aeed. assumptois aema that e listl t: ehar, p riefy dei In lditon, write a brfsumrnary, no more than a few pphs, denyour hold/sell recomendation, the investment, andy impottant paints. Please be concise. Assame that "senior ranagewill be eviewing and bsing heis decsiors on what yuu bave producod represents the property. Hint Do notassme the puchase pice is an indicatioa of FNMV Tb Pr party 2010 vintag , 32. ccar ticagit crues docked facility locate 1m tnv huart of the Salt iak City's main industrial corridor. The Property is 70.1% eased to two cenants, 2 Local manafacturer ("Tenant A') and a glehsl supply chai mariagement oompanyTensnt HTh thi un is vacant. Tenant A's 136373 SP lease expires in May 34 Teat s 113,000 SF kase expires in October 2020 Leases are structured as each tenan its share of opersting expenses. Thereis in Sakai sn excel file wich an inecmplete eash few atatement from the Angus sofrware aysiem and a complete rent roll (ecall that the l is a socthin of lease abstract that provides the impottant coatLectuaeeners of tenant ents), create valaton spreadsheet as a separate sheet in this tue. ( of extra Feel feee to build the model out as you see fit and ceate sny schedale tabs that you feel are ecessary NOTE: Build a Dexible rodel that can be used to evaluate different economic scenatios. I particular, create nput cells where current ratket ent, discount eate, and termical cap rate are stored, and referencose cs in your model so that yg valuatio asuiptikily. Vacancy& 5.0% and 1% General Inflation: 0% 3,0% Management Fee as % of Cap Ex Reserve: Market Tem (ears Yoa wil also need a atrategy for reaching stabiliain I would create a space sbsorption pan that is easily mexdifsd withir theodel ini order to dositivity aalyxis 0.10/SP t Rental Rate $0.357 mcath Please be sare to shoxx the folowing Renewal Prohabilitv: IRR based on tbe 519,50,000 purchase price levero and evere (that is, oace based o asset cash flow and apaia based on equiry cash low, thas yoa will aeed debt cash Bo.) Equity multiple cachpTxl Cash on cash en ech petiod e market assunmptions 6-months 6,0% of tet rent on now, and 1crewaB $1.00/SI on aew lases. $0.50/ST oa Lease-up Time: sing Commissions Tenunt Imiprovements: lleases iscnunt Rate: Terminal Cap Rate: This exercise may be done in groups of up to 3. Note, however, everyone needs to participae questiuns frum this exercise are likely to be asked on the tinal. ebt Terma erest Rate an Term: 65M Life of loan Amort Schedule Notes: ) Gross rent is rentcost secoveries (if any). Net rent is base rentonl Ca a . nacrve . 15 an arm ualtzed cotitrate of cap cx expense Operating oost estimates can b" fuund m the attached speadsheet.) Lesse eommissioens st chatge anat aa rens over the life of the new lease. 4 Generl vacancy is wat we've been calling make vacancy-itablized vacancy. 5 General inflaioais an entry is Argas that is used to inlate matket cent rates, costs, etc,ualess vrwrittan t th "lin ite kvel. Aua that t isoterwritt tatarkrt rents, operating costs, and cap ex inflate at 2%/yr Management fees are zein Durable operating costs under NNN lessea. Do not inlae TI 5) Lease-up time is the trne it takes to create a new ase under tbe ew tt scenatio