You are a Real Estate developer building a small office tower in Montreal. The construction will take one year and the units have all been pre-leased. The stabilized NOI at opening will be $750,000 and comparable cap rates are 6%. The construction lender is willing to finance the project based on the terms and conditions shown below. a) Based on the budget, calculate the oustanding construction loan at the end of the year. b) How much equity will you be able to withdraw at the end of the construction period if you take-out a mortgage with the terms and condit Please make your calculations to the right of the data on this worksheet. Development Budget: Land 2,000,000 Site preparation 250,000 Hard costs 8,000,000 Professional fees 300,000 Permits 75,000 Project management 150,000 Leasing commissions 16,000 Other soft costs 195.000 10,986,000 Interest TOTAL 109,000 11,095,000 Cash flows The land is purchased and site preparation occur in the first month. The soft cost (excluding interest) are evenly distributed over the 12 month period. The hard costs are evenly dirtibuted over month 3 to month 12. All cash flows occur at the end of the month. Construction loan: LTC Interest rate 65.0% 6.0% Stabilized NOI at opening 750,000 Comparable cap ates 6.0% Mortgage loan: Term (years) 5 Amortization period (years) 20 Mortgage rate 4.0% Maximum LTV 75.0% Minimum DSCR 1.25