Real Estate 1

Real Estate 1 - Rock's (to be named) Shopping Center Year...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Rock's (to be named) Shopping Center Year 1 2 3 4 5 6 Potential gross income 77,433 79,368 81,353 83,386 85,471 87,608 (3,872) (3,968) (4,068) (4,169) (4,274) (4,380) Effective gross income 73,561 75,400 77,285 79,217 81,197 83,227 Potential expense reimbursement Common area maintenance 720 743 768 793 818 845 Property tax expense 9,600 9,912 10,234 10,567 10,910 11,265 Property insurance 1,440 1,487 1,535 1,585 1,637 1,690 Total 11,760 12,142 12,537 12,944 13,365 13,799 (588) (1,052) (1,087) (1,122) (1,158) (1,196) Net expense reimbursement 11,172 11,090 11,450 11,822 12,207 12,603 Total operating receipts 84,733 86,490 88,735 91,039 93,404 95,831 Less: Common area maintenance 720 743 768 793 818 845 Property tax expense 9,600 9,912 10,234 10,567 10,910 11,265 Property insurance 1,440 1,487 1,535 1,585 1,637 1,690 Management expense 4,237 4,324 4,437 4,552 4,670 4,792 Replacement reserves 0 Total operating expense Net Operating Income 66,736 68,446 70,198 72,958 74,822 78,558 Less: Leasing commissions Tenant improvements Total non-operating expense Net operating income After non-op expenses 66,736 68,446 70,198 65,972 74,822 69,011 Less: Maximum mortgage loan pmt Before-tax cash flow
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Assumptions and Parameters Property Variables Total Square Feet 12,000 Vacancy and Collection Loss Rate 5% Common Area Maintenance(psf) 0.06 Property Tax(psf) 0.80 Property Insurance(psf) 0.12 Management Fee (% of Total Operating Receipts) 5% Brokerage Commission Rate 2% Annual Replacement Reserves 2,000 TI Costs 1.50 Economic or Market Variables Consumer Price Index 2.50% Reimbursable Expense Growth Rate 3.25% Market Rental Growth Rate 4% For Part 2: Permanent Lender's Terms Debt Coverage Ratio 1.25 Annual Interest Rate 12% Loan Maturity 25 Loan-to-Value Ratio 0.75 Loan-to-Cost Ratio 0.75 Capitalization Rate 12% Equity-to-Cost Ratio 0.25
Background image of page 2
Aggie Convenience Store Tenant Variables: Tenant Square feet 2600 Lease Term 20 Annual Rent Year 1 Year 2 Year 3 Year 4 Year 5 Base Rent $5.80 $5.80 $5.95 $6.09 $6.25 $6.40 Vacancy 5% Year 1 2 3 4 5 Potential gross income $15,080.00 $15,457.00 $15,843.43 $16,239.51 $16,645.50 Less: Vacancy and collection loss -$754.00 -$772.85 -$792.17 -$811.98 -$832.27 Effective gross income $14,326.00 $14,684.15 $15,051.25 $15,427.54 $15,813.22 Potential expense reimbursement Common area maintenance 156 161 166 172 177 Property tax expense 2,080 2,148 2,217
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/31/2008 for the course FINC 475 taught by Professor Donnell during the Spring '08 term at Texas A&M.

Page1 / 13

Real Estate 1 - Rock's (to be named) Shopping Center Year...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online