This assignment is to create an analysis for purchasing a property, projecting rents, expense pass throughs, expenses, capital over a holding period through the sale. Below are is all the information that you need to do the calculations and determine the metrics behind the investment.

Market rent $30/sf for gross leases

$22/sf for net leases

Growth rate 0.03 for everything

Rent Roll

Tenant SF Rent/yr /sf Stop Start Month Term Steps

Tenant A 25,000 33 $9.40 1 10 3% per year

Tenant B 30,000 27 $8.50 1 8 32 in yr 5

Tenant C 35,000 20 Net 1 3 N/A

Tenant D 10,000 30 10 7 10 36 in month 67

Total

The tenant will pay for expenses that have risen to a level above their expense stop. Net leases have a stop of zero, so they pay all reimbursable expense.

Tenants A and B are base year while tenant C is Net.

Vacancy/Credit Loss 0.05

Expense Category Expense per foot

Taxes 5

R&M 1

Insurance 0.25

Utilities 2

Payroll 0.85

Security 0.5

G&A 0.4

Total Reimbursable 10

Non Reimbursable

Management 3% of EGI

Assume zero rollover possibility. Downtime (vacancy at end of lease) 6 months

Total Capital at rollover 25/sf growing at inflation

From the above information, you should be able to create a proforma.

Reversion 0.075

Discount Rate 0.10

Term 5 years

Amortization 30

Rate 0.04

LTV 0.7

Cash flow after debt Service

Cash on Cash Return