10 developer is building a Dala Centre in Longeuil, Quebec. She has already negociated a lease with one operator, who will take up the entire building. The operator will move in and start paying rent as 11 soon as construction is finished 12 13 Lease, financing and market data are shown below. 14 15 16 17 Please make your calculations to the right of the data on this worksheet. 9Upload your file onto Moodle by the deadline indicated on the course outline. 20 21 a) Based on the budget, calculate the oustanding construction loan at the end of construction. b) The developer plans to take-out a mortgage at the end of construction, when the lease starts. How much equity will she be able to withdraw? 22 23 Construction loan: A 24 55 25 LTC 26 Interest rate Cash flows: 0 The land is purchased and site preparation will be paid in the First month. The hard costs will be evenly 82 distributed over months 2 to 10 The soft cost (excluding interest) are evenly distributed over the 10 4 month period. All cash flows occur at the end of 15 the month 3 Development Budget: Land 2 Site preparation 3 Hard costs 4 Permits 5 Property taxes 16 Insurance 7 Professionals Estimated Interest TOTAL Lease Type Total Base Rent per year Building Operating Expenses Cap rate Mortgage loan: Term (years) Amortization period (years) Mortgage rate Maximum LTY Minimum DSCR 65.0% 6.0% Sheet1 1250,000 25,000 4,000,000 50,000 100,000 10,000 150,000 5,595,000 60,500 5.645,500 NINN 400,000 75,000 Sheet2 5.50% 5 20 4.0% 75.0% 125 Land Acquisition Soft Cost Hard Cost Cash out Equity Total Budget Maximum Lo LTC 5,645,500 3,663,575.0 Construction Loan Opening balance Draw (end of quarter] Rate Capitalized interest Ending balance Q1 1,250,000 1,250,000 1281,000 0 6.00% 0 Q2 31,000 447,222 478,222 694,925 0 216.703 6.00% 0.00% 216,703 03 Required Equity 65% 1975,925.0 31,000 447,222 478.222 0 216.703 478,222 6.00% -3,251 258,269 Q4 31,000 447,222 478,222 0 258 269 478,222 6.50% 4,197 740.688 Q5 31,000 447,222 478,222 0 740.688 478,222 6.50% 12.036 1,230,946 Q6 Grade (out of 10): 31,000 447,222 478,222 0 1,230,946 478,222 6.50% 20,003 1,729,171 Q7 31,000 447,222 478,222 0 1,729,171 478,222 6.00% 25,938 2,233.331 Q8 31,000 447 222 478,222 0 2.233,331 478,222 6.00% 33.500 2,745,053 Q9 31,000 447,222 Q10 31,000 447,222 Total 1,250,000 279.000 4,025,000 5,554.000 1,975,925