You have been asked to develop a pro forma statement of cash flow for Betts Distribution Center, an Internet-based order fulfillment/distribution/office/warehouse property. In addition to recoverable operating expenses, the new tenant will be billed for pass throughs including insurance and property taxes, which will then be paid by the owner.The information given to you is listed below.
Property Information:
BETTS DISTRIBUTION CENTER
Age of Improvement .......................................................................... 8 years old
Rentable Space ............................................................................   200,000 sq. ft.
Single Tenant .......................................................... 10 year lease term, net, net
Financial Information:
Rent ............................................................... $7.00 per sq. ft. (7-year term), flat
Recoverable Expenses from Tenant .............................. $1.50 per sq. ft., fixed
Operating Expenses .............................................................................. $700,000
Property Taxes ......................................................................................... $50,000
Insurance .................................................................................................. $15,000
Other Cash Outlays:
Allowances for:
Recurring CAPEX/Improve Allowance ................................................... $60,000
a. Develop a pro forma statement for the Betts property for a base year showing net operating income (NOI).
b. If you plan to begin work on future pro formas for Betts, list at least five major factors that you would consider.