You have the opportunity to invest in an office building in downtown Jacksonville, in which you would purchase as a 5 year holding investment with a 10 required rate of return (discount rate) The building offers a total rentable area of 20,000 square feet, and 100 garage parking spaces You are provided the following information on the property from the current owner 1 The owner is asking $3,500,000 for the building 2 The owner has annual contracts from tenants on the building for 18,000 square feet of the total space at $20 00 psf, gross Additionally, 90 parking spaces are leased by annual contract for $120 00 per month, per space You expect this same office vacancy to occur into perpetuity, and expect parking vacancy to equally correlate with the office vacancy These lease terms are found to be in line with the downtown office market 3 Current annual operating expenses for the building follow Management Fees Annual Real Estate Taxes Hazard Insurance Maintenance Repairs Supplies Capital Replacement Allowance $8,000 $4,500 Administrative Costs Operating Costs of the Garage $6,500 5 of EGI $9,000 $3,000 $11,000 $4,000 Your mortgage lender has committed to you a loan to purchase the office building (should you decide to partake in the investment), which would offer the following terms Loan to Value Interest Rate Loan Duration Payment Prepayment Penalty $1,500,000 Mtg $2,000,000 hard equity 6 FRM 25 years, fully amortizing $115,974 per annum None A study of the office building market in downtown Jacksonville indicates the following trended increases in incomes and expenses, which can safely be assumed in analysis forecasts Office rents Parking rents Real Estate Taxes Other Operating Expenses per annum per annum per annum per annum Assignment Based on the above information, prepare a reconstructed year one income and expense statement, and a reconstructed income and expense statement forecasting returns for the 5 year holding period (six years analysis required) For both statements, calculate through Before Tax Cash Flows

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You have the opportunity to invest in an office building in downtown Jacksonville, in which you would purchase as a 5-year holding investment with a

You have the opportunity to invest in an office building in downtown Jacksonville, in which you would purchase as a 5-year holding investment with a 10% required rate of return (discount rate). The building offers a total rentable area of 20,000 square feet, and 100 garage-parking spaces. You are provided the following information on the property from the current owner:

1. The owner is asking $3,500,000 for the building.

2. The owner has annual contracts from tenants on the building for 18,000 square feet of the total space at $20.00 psf, gross. Additionally, 90 parking spaces are leased by annual contract for $120.00 per month, per space. You expect this same office vacancy to occur into perpetuity, and expect parking vacancy to equally correlate with the office vacancy. These lease terms are found to be in line with the downtown office market.

3. Current annual operating expenses for the building follow:

Management Fees:
Annual Real Estate Taxes:
Hazard Insurance:
Maintenance/Repairs:
Supplies
Capital Replacement Allowance: $8,000
- $4,500
Administrative Costs:
Operating Costs of the Garage: $6,500

5% of EGI $9,000 $3,000 $11,000 $4,000

Your mortgage lender has committed to you a loan to purchase the office building (should you decide to partake in the investment), which would offer the following terms:

Loan-to-Value: Interest Rate: Loan Duration: Payment: Prepayment Penalty:

$1,500,000 Mtg; $2,000,000 hard equity

6% FRM 25 years, fully amortizing $115,974 per annum None

A study of the office building market in downtown Jacksonville indicates the following trended increases in incomes and expenses, which can safely be assumed in analysis forecasts:

Office rents:
Parking rents:
Real Estate Taxes:
Other Operating Expenses:

per annum
per annum
per annum
per annum

Assignment: Based on the above information, prepare a reconstructed year-one income and expense statement, and a reconstructed income and expense statement forecasting returns for the 5-year holding period (six years analysis required). For both statements, calculate through Before Tax Cash Flows.