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You purchased a 296,000 SF warehouse building 9 years ago for $9,472,000. You are considering refinancing. Currently, rental rates average $5.25/SF. Market vacancies are 8.50%.
You purchased a 296,000 SF warehouse building 9 years ago for $9,472,000. You are considering refinancing. Currently, rental rates average $5.25/SF. Market vacancies are 8.50%. The subject OER is stable around 15%. Market cap rates are now 8.5%. Your lender has proposed refinancing based on a current valuation using these market terms. Below are the original loan terms from 9 years ago and the new proposed loan terms. Determine the following: B1. The current NOI based on the current market terms. B2. The current market value based on the current NOI and current market cap rate. B3. The maximum amount you can borrow with the new loan based on the LTV. B4. The new annual debt service (ADS) based on the new loan terms. B5. The balance of the original loan at the end of year 9 . B6. The prepayment penalty for the original loan. B7. The net disbursement for the new loan considering the prepayment penalty for the old loan. B8. The effective borrowing cost for the new loan. B9. The DCR for the new loan based on the current NOI. B10. Does the property qualify for this new loan based on its current income? Why or why not
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