Question: Purchase $45,000,000 Office space - Max 60% LTV loan DSCR requirement: 1.3 - Debt Yield Ratio must be above 10% PGI: 15% of acquisition price.

Purchase $45,000,000 Office space - Max 60% LTV loan

DSCR requirement: 1.3 - Debt Yield Ratio must be above 10%

PGI: 15% of acquisition price. Increases at 2% a year for entire hold period

Vacancy: 18% and decreases to 10% yr 2-5

CAPEX: 7% for entire hold period

OPEX: 35% of EGI

WACC: 9.5% - Reinvestment Rate: 13%

Mortgage Rate: 5.25% 5/1 ARM - Mortgage Term: 20 yr.

Closing costs: 2% of L/A- Future Selling costs: 4%

Going in Market Cap rate is 6.48. Going out CAP rate is 6.48

5 Year Hold - Tax rate 20%

Investor requires a Before Tax IRR of 19%

What is the loan balance after 60 months?

A.

$22,632,537

B.

$23,475,987

C.

$21,671,927

D.

$21,988,172

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

CPP 6-1 (#2) Complete 4th Quarter and Year-End Payroll Reporting Complete Form 941 for the 4th quarter for TCLH Industries (which is located at 202 Whitmore Avenue, Durham, NC 27701; Employer...

Q:

QUESTION 10 To overcome the potential shortcomings of single-year decision making metrics, many investors in real estate also perform multiyear discounted cash flow (DCF) valuation. DCF valuation...

Q:

QUESTION 11 Calculate the Gross Sale Price assuming a property is sold at the end of year five if the following information is known: Year 1 NOI = $102,500, Year 6 NOI = $134,500, Going in cap rate =...

Q:

Purchase $45,000,000 Office space - Max 60% LTV loan DSCR requirement: 1.3 - Debt Yield Ratio must be above 10% PGI: 15% of acquisition price. Increases at 2% a year for entire hold period Vacancy:...

Q:

Purchase $45,000,000 Office space - Max 60% LTV loan DSCR requirement: 1.3 - Debt Yield Ratio must be above 10% PGI: 15% of acquisition price. Increases at 2% a year for entire hold period Vacancy:...

Q:

Questions 13-30will use the assumptions as explained below: Purchase $45,000,000 Office space - Max 60% LTV loan DSCR requirement: 1.3 - Debt Yield Ratio must be above 10% PGI: 15% of acquisition...

Q:

Please do these questions: -What sources of value most plausibly account for the differences between buyer and seller? -Structure and execute a discounted cash flow valuation of all of the MW...

Q:

From the case study, create an argument for the use of principles-based accounting for leases over rules-based accounting under GAAP, based on the financial statement restatements in the restaurant...

Q:

Fromthecasestudy: 1)CreateanargumentfortheuseofprinciplesbasedaccountingforleasesoverrulesbasedaccountingunderGAAP,basedonthefinancialstatement...

Q:

From the case study, create an argument for the use of principles-based accounting for leases over rules-based accounting under GAAP, based on the financial statement restatements in the restaurant...

Q:

Quantitative Analysis Estimate each propertys current value by calculating the present discounted value of expected future cash flows. The forward-looking cash flows have been provided for you in the...

Q:

Private insurance provides numerous coverages that can be used to meet specific loss situations. For each of the following situations, identify a private insurance coverage that would provide the...

Q:

Why is it important that every employee periodically take a leave of absence or vacation?

Q:

Solve the following simultaneous equations. x+3y=0 2x + 3y = 1

Q:

Ireland has unique elements to its flora, and as a result, has a responsibility to conserve some of its plant species, especially those protected under national and international legislation. Discuss...

Q:

The seaweed industry is expanding worldwide, but the domestication of the seaweed crops is at its infancy. How do humans domesticate crops and which questions need to be answered to efficiently...

Q:

Discuss the impact of INNS both locally (Ireland) and globally. List the benefits and negatives its had ( essay style question so requires detail)

Q:

1. A metal bar of mass m slides frictionlessly on two parallel conducting rails a distance I apart as shown in figure below. A resistor R is connected across the rails, and a magnetic field B,...

Q:

Select one of the following interactive learning environments: wikis, blogs, multi-user virtual environments (muves), course management system, microworlds. Write a paper that addresses the...

Q:

True or False: Brands can turn an entire product catalog into product Pins. True FalseTrue or False: Brands can turn an entire product catalog into product Pins. True False

Q:

=+4. What factors are crucial in the cost and revenue structure of the book industry?

Q:

=+2. What sales policy instruments are important in the media sector?

Q:

=+2. Explain the interactions in the newspaper and magazine market!