Hi, please show work and how to do it on excel. Have to turn in the excel.

Set up an annual proforma and derive an appraisal valution of the property below. Quote your answer to the nearest $1,000.

You are appraising an office property that consists of a total of 38,000 sqft of rentable space, split equally accross two floors.Assume a holding period of 5 years, and that the property will sell at a cap rate of 9% at the end of year 5, with selling expenses of 4% of the gross price.

You find 5 rent comparables, top floors renting for $1.83, $1.77, $1.43, $1.60, and $1.66/sqft/month, and bottom floors for $2.01, $1.98, $2.20, $2.01, and $1.96/sqft/month. Based on the lease adjustments you had to make to arive at these values, you decide to weight these by 35%, 25%, 20%, 15%, and 5%, respectively, for both top and bottom floors. For subsequent years 2, 3,..., you expect market rents to rise by inflation, 3% per year.

Typical comprable office space in your market runs at a vacancy and collection loss rate of 15% of PGI. You are renting cell tower space on the roof for $6,000/yr, with a one-time jump of 15% in year 3, and growing at inflation each year thereafter (4, 5, ...).

Fixed expenses and reserves will grow 4% per year. For year 1, these expenses are: RE taxes: $70,000; insurance: $20,000; CapEx: $15,000.

Variable expenses are a fraction of effective gross income: 4% for maintenance, 1.2% for janitorial, 4% for utilities, 9% for management, 1.5% for leasing commissions, and 2% for TI.

Comprarable properties sell at a 13% discount rate.