Multiple Occupancy 300,000 SF Multistory Industrial Building with consistent 5% vacancy. Class B Buildings with 24' Clear
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Question:
- Multiple Occupancy 300,000 SF Multistory Industrial Building with consistent 5% vacancy. Class "B" Buildings with 24' Clear Ceiling Heights
- In addition, 150,000 SF of tenants leave at end of year 3, and are replaced in 6 months with tenants paying $15/SF NNN
- Lease Term = 5-year leases with 5-year options
- Initial Rent $12/SF NNN, Replacement Tenant Rent $15/SF NNN
- Additional income consists of 40 truck parking spaces rented for $400/month each. Spaces are fully rented all the time with no vacancy.
- Expenses are as follows (all as a % of EGI)
- Property Taxes 15%
- Insurance 3%
- Maintenance 20%
- Management Fee 8%
- Reserves for Replacement 5%
- Other expenses 5%
- Price = $65,000,000
- Capital Stack:
- 80% LTV @6.5% Interest Rate, 25 Year Term, Fully Amortized
- Constrained by 1.2 DSCR, requiring
- 20% Borrowed Equity@ 12% Preferred Return (Interest)
- 10% Interest Rate on Shortfalls
- Remainder Cash Equity
- Terminal Cap Rate = 5.5%
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