Bonus question $(10$ bonus points$)$

You purchased a $188,000SF$ warehouse building $6$ years ago for $$5,452,000.$ You are considering refinancing.

Currently, rental rates average $$\frac{4\mathrm{.}50}{S}F.$ Market vacancies are $8\mathrm{.}50\%.$ The subject OER is stable around $19\%.$ Market cap rates are now $8\mathrm{.}0\%.$ Your lender has proposed refinancing based on a current valuation using these market terms.

Below are the original loan terms from $9$ years ago and the new proposed loan terms.

$\backslash$table$[[$ORIGINAL LOAN $($OLD$),$NEW LOAN$],[5\mathrm{.}50\%$ interest rate,$7\mathrm{.}25\%$ interest rate$],[20-$year amortization,$30-$year amortization$],[$Monthly compounding,Monthly compounding$],[70\%$ LTV ratio,$75\%$ LTV ratio$],[$Minimum $1\mathrm{.}35$ DCR$,$Minimum $1\mathrm{.}25$ DCR$],[1\mathrm{.}5\%$ prepayment penalty $(1\mathrm{.}5\%$ of loan balance at$,],[$time of prepayment$),]]$

Determine the following:

B$1.$ The current NOI.

B$2.$ The current market value.

B$3.$ The maximum amount you can borrow with the new loan based on the LTV$.$

B$4.$ The maximum amount you can borrow with the new loan based on the DCR$.$

B$5.$ The new annual debt service $($ADS$)$ for the new loan.

B$6.$ The balance of the original loan at the end of year $6.$

B$7.$ The prepayment penalty for the original loan, which is a loan fee for the new loan.

B$8.$ The effective borrowing cost for the new loan.

B$9.$ The debt yield for the new loan.

B$10.$ Does the property qualify for this new loan based on its current income? Why or why not?

Your answer: