Question: An appraiser engaged by the lender would conservatively value the property at $350,000,000 using an NOI valuation of $21,000,000. Loan Amount: Loan to Value of

An appraiser engaged by the lender would conservatively value the property at $350,000,000 using an NOI valuation of $21,000,000.

Loan Amount: Loan to Value of 65% of Fair Market Value subject to a Minimum Debt Service Coverage Ratio of 1.30x.

Loan Term: 10 years

Spread: Fixed-rate loan with spread 225 basis points over U.S. Treasury Bonds; Assume the current 10-year Treasury Bond rate is 2.75%; Floor interest rate of 4.25%; ceiling interest rate of 6.25%

Amortization Period: 25 years (paid monthly)

Fees and Points (paid at closing): 1.00 point fee to Banker's company.. Estimated loan costs of $275,000 (including lender's legal and other loan closing costs)

Personal Guarantee: Non-recourse, with the exception of creating recourse liability

Closing: Within 30 days of title vesting in new entity

Question:

1) What is the interest rate of the loan

2) What is the interest rate on the loan if, at the time the loan is made, the Treasury Bond rate is 1.75%?

3) What is the interest rate on the loan if, at the time the loan is made, the Treasury Bond rate is instead 3.95%?

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