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You have a building currently valued at $ 1 5 , 0 0 0 , 0 0 0 for which you seek a $ 1

You have a building currently valued at $15,000,000 for which you seek a $10,000,000mortgage (25-year term with 7 year balloon). You are offered a SAM at 6%, where you mustalso pay the lender 45% of the appreciation after 7 years. For a 9% annual inflation rate forthe building, and assuming you hold the building for 7 years, what are your cash flows on theloan. What is the yield to the lender?

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