Please use the excel tamplate to complete, show calculation formula step by step and show solution. Site Acquisition Costs

Construction Costs

$=$

Total Expected Development Costs

$x$

Loan to Value Ratio

$=$

Permanent Mortgage

$x$

Annualized Mortgage Constant

$=$

Cash Required for Debt Service

$x$

Lender DSCR

$=$

Property NOI

$+$

Estimated Operating Expenses

$=$

Required Effective Gross Income

I

Occupancy Rate

$=$

Required Gross Revenue

I

Leaseable Square Feet

$=$

Rent Required Per Square Foot

Q: Is this average rent required per square foot achievable?

II$.$ SIMPLE FINANCIAL FEASIBILITY ANALYSIS $($DETERMINE COSTS$)$

Leaseable Square Feet

$x$

Expected Rent Per Square Foot

$=$

Potential Projected Gross Income

Vacancy Allowance

$=$

Expected Effective Gross Income

Projected Operating Expenses

$=$

Expected Property NOI

I

DSCR

$/$

Annual Debt Service

I

Months in Year

$=$

Monthly Payment

Compute Supportable Mortgage $($Pmt n$,$ i$)$

$/$

Maximum Loan to Value Ratio$]$

Maximum Supportable Total Development Costs

Q: Can the project be built for this amount which includes all costs?

Maximum Supportable Total Development Costs

less

Expected Construction Costs $($other than site$)]$

Maximum Supportable Site Acquisition Cost

Q: Can the site be acquired for this or something less?The investor$-$developer would not be comfortable with a $7\mathrm{.}8$ percent return on cost because the $$margin for error$$ is too risky. If construction costs are higher or rents are lower than anticipated, the project may not be feasible.

Based on the fact that the project appears to have $9,360$ square feet of surface area in excess of zoning requirements, the developer could make an argument to the planning department for an additional $10$ units, $250$ units in total, or $25$ units per acre. How would this affect financial feasibility? What could be included in such an argument? Why would a public regulatory institution be interested in increasing density to $25$ units per acre? Why not?

Instead of $($a$),$ suppose the developer could build a $240-$unit luxury apartment complex with a cost of $$83,000$ per unit. What would such a project have to rent for $($per square foot$)$ to make an $8$ percent return on total cost? What risk factors would the developer have to consider?