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TriBridge plans to purchase an existing apartment complex called The Standard and needs to run an analysis of the investment. The Standard has 2 0
TriBridge plans to purchase an existing apartment complex called The Standard and needs to run an analysis
of the investment.
The Standard has units and inplace rents of $ per month per unit. Due to substandard
management, the asset is currently occupied. The current annual operating expenses are $
per year. Immediately in Year we expect to operate at occupancy during our year investment hold
and increase rents by targeting a NOI margin in Year ie the expenses will be different
Assume rents continue to increase at while expenses increase by
We expect to pay a cap rate on current financials assume purchase price is total capitalization,
meaning there are no closing costs or capitalized budgets Lenders will provide a loan at acquisition that
is: no more than loantovalue LTV; has no less than a debt yield; and has at least a
x debt service coverage ratio DSCR Assume the debt costs per year, is interestonly ie does
not amortize and has a year term.
Assuming we sell the property in Year at a cap rate assume no closing costs please complete the
Excel such that the following questions are answered and please replicate answers below:
What is the expected purchase price?
How much debt can we place on the property? What constrained the loan proceeds?
In Year what are:
a Debt Yield
b DSCR
c Unlevered Yield
d Equity levered Yield
What should we expect the sale value to be
What is the IRR?
What is the investment multiple?
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