NOTE: The case study contains all the necessary background information on this asset to complete the analysis except for current market information on the DC Office market.

Case study: 1775 Pennsylvania Office DC - Spring 2020.pdf Download 1775 Pennsylvania Office DC - Spring 2020.pdf

To apply the concepts in this course, you will engage in a case study assignment from Weeks 1 through 6 for an investment opportunity: a vacant office building located at 1775 Pennsylvania Avenue, Washington, DC.

Refer to the posted case study document and excel template as a basis for this analysis. Reminder that the provided template is just that, a template, and it should help frame the analysis but will not be the sole path to your solution. Take ownership of its calculations and results. Check everything!

• Address the following:
  • Define your Mission Statement to include minimum financial thresholds (e.g., EIRR, EMx. etc.)
  • What stage is this building in its financial and physical lifecycle? What risks should investors be aware of during this stage? Hint...look up definition of life cycle before responding. Its helpful to explain why the property is NOT in one or two other stages by considering what it would take to be qualified differently.
  • What are two positive and two negative Alpha (Market) and Beta (Property) considerations to consider for this asset? For each of the negatives and positives identified, what are the mitigating or enhancing factors an investor should consider? How realistic are these factors?
  • Compared to an apartment building, identify at least three specific risks investors should be aware of when investing in an office building.
  • Based on the market information provided what economic trends in the Washington, DC market would lead investors to consider this a "safe" or "unsafe" market to invest. What factors would potentially concern an investor? What additional information would you wish to have access too so as to feel safer?
  • Based on the transaction volumes presented in the market study do you believe Washington, DC should be considered a highly liquid market? What are some examples of non-liquid markets? What considerations should investors give to highly liquid vs. non-liquid markets? What is the impact of a liquid market on the eventual sale of 1775 Pennsylvania Avenue? Hintstart you answer by defining what market liquidity is.
  • There are always events that disrupt the capital lending cycle. As such what current events are impacting that cycle and what is the impact on 1775?