Question: Create a 5-year ProForma based on the Exhibit 16 information (current Income Statement). Assume the Income Statement reflects EOY 2012, and occupancy begins August 2014

Create a 5-year ProForma based on the Exhibit 16 information (current Income Statement). Assume the Income Statement reflects EOY 2012, and occupancy begins August 2014 (20 months growth).

Assume a 3.5% (between 2.5 and 5 percent, page 4) rent growth, 2% vacancy rate (Exhibit 9), 2% loss due to tenant credit issues/evictions.

Management fee is a percentage of total income (refer to current income statement, round to whole percent). The capital reserve is 25% and the average capitalization rate is 6.5%. Use (cap rate*(1-capex reserve)) + growth rate) to determine discount rate which drives NPV effective at occupancy.

Create a 5-year ProForma based on the Exhibit 16 information (current

Exhibit 16: "Current" Income Statement Exhibit 16: "Current" Income Statement

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