Consider the following cash flow statement for a property fully leased to a new tenant on a NNN basis beginning in Year 1:

			Year 1
Potential Base Rent			$750,000
Free Rent and Concessions			$0
Absorption and Turnover Vacancy			$0
Total Rental Revenue			$750,000
Expense Recoveries			$350,000
Total Tenant Revenue			$1,100,000
Other Revenues			$0
Potential gross Revenue			$1,100,000
Vacancy and Collection Loss			$0
Effective Gross Revenue			$1,100,000
Recoverable Opex			$350,000
NonRecoverable Opex			$50,000
Total Opex			$400,000
Net Operating Income			$700,000

What is the Net Operating Income for Year 2 if the scheduled base rent grows by 10% and all expenses grow by 2.5%?

What would the Year 1 NOI be if there were 3 months of downtime before the tenant's lease began AND the tenant had received 3 months of free base rent during the year?

What is the Y1 NOI return if the property was purchased for $15M?

What is the Y1 Levered NOI return if the property was purchased for $15,000,000, and had a $10,000,000 mortgage with annual debt service payments of $350,000?

Answer rating: 100% (QA)

solution 1 To calculate the year 2 net operating income NOIwe first need to update the revenue and expenses based on the growth rate scheduled base rent growth 750000110 825000 expense growth 40000012... View the full answer