Robust Properties is planning to go public by creating a REIT that will offer 1,690,000 million shares of stock. It is currently trying to develop a pro forma set of financial statements. Robust is faced with a number of questions about its handling of some accounting and financial disclosure issues. Robust Properties I. Major Financial Information: 6. Assets-properties (actual cost) $ 100,650,000 b. Depreciable basis-buildings only 5 80,520,800 c. Useful life 40 years d. Operating expenses 30% of rents e. Management expenses-third parties 5% of rests 1. General and administrative expenses 35 of rests 0. Mortgage at s interest only, 10 years $ 39,065.000 h. Financing fees $ 906,500 II. Lease Information: a. Average lease term 5 years b. Leasable space 1,000,000 square feet C. Base rents (year 1) $ 28 pounds per square feet d. Escalation factor-rents per year e. Lease commissions 4% of year 1 rent 1. Tenant improvements 3 13.25 pounds per square feet The management of Robust Properties has asked you to prepare preliminary pro forma financials for the next three years. Specifically, you should have (1) a beginning balance sheet (2) operating statements for each of the next three years, and (3) all relevant financial ratios for year 1 results only. Robust will pay all financing fees, tenant improvements, and lease commissions upon commencing operations. It would like to pay a minimum dividend of $6.25 per share. In preparing your pro forma operating statements, Robust wants you to consider the effects of reporting in the following two ways: Permired: maulations and final onswers to 2 La comissions 4% of year 1 rent f. Tenant improvements $ 13.25 pounds per square feet The management of Robust Properties has asked you to prepare preliminary pro forma financials for the next three years Specifically, you should have (1) a beginning balance sheet (2) operating statements for each of the next three years, and (3) all relevant financial ratios for year 1 results only. Robust will pay all financing fees, tenant improvements, and lease commissions upon commencing operations. It would like to pay a minimum dividend of $6.25 per share In preparing your pro forma operating statements, Robust wants you to consider the effects of reporting in the following two ways: Required: .. What would EPS, FFO, and ROC be under both approaches? (Round your intermediate calculations and final answers to 2 decimal places.) Aproach Approach Lease commissions Amortize, years Expense in year 1 Finance fees Amortize, 10 years Expense in year 1 Tenant improvements Depreciate, 40 years Depreciate over 5 year lease ter Buildings Depreciate) 40 years Depreciate, 40 years Approach 1 Approach 2 EPS FFO ROC Robust Properties is planning to go public by creating a REIT that will offer 1,690,000 million shares of stock. It is currently trying to develop a pro forma set of financial statements. Robust is faced with a number of questions about its handling of some accounting and financial disclosure issues. Robust Properties I. Major Financial Information: 6. Assets-properties (actual cost) $ 100,650,000 b. Depreciable basis-buildings only 5 80,520,800 c. Useful life 40 years d. Operating expenses 30% of rents e. Management expenses-third parties 5% of rests 1. General and administrative expenses 35 of rests 0. Mortgage at s interest only, 10 years $ 39,065.000 h. Financing fees $ 906,500 II. Lease Information: a. Average lease term 5 years b. Leasable space 1,000,000 square feet C. Base rents (year 1) $ 28 pounds per square feet d. Escalation factor-rents per year e. Lease commissions 4% of year 1 rent 1. Tenant improvements 3 13.25 pounds per square feet The management of Robust Properties has asked you to prepare preliminary pro forma financials for the next three years. Specifically, you should have (1) a beginning balance sheet (2) operating statements for each of the next three years, and (3) all relevant financial ratios for year 1 results only. Robust will pay all financing fees, tenant improvements, and lease commissions upon commencing operations. It would like to pay a minimum dividend of $6.25 per share. In preparing your pro forma operating statements, Robust wants you to consider the effects of reporting in the following two ways: Permired: maulations and final onswers to 2 La comissions 4% of year 1 rent f. Tenant improvements $ 13.25 pounds per square feet The management of Robust Properties has asked you to prepare preliminary pro forma financials for the next three years Specifically, you should have (1) a beginning balance sheet (2) operating statements for each of the next three years, and (3) all relevant financial ratios for year 1 results only. Robust will pay all financing fees, tenant improvements, and lease commissions upon commencing operations. It would like to pay a minimum dividend of $6.25 per share In preparing your pro forma operating statements, Robust wants you to consider the effects of reporting in the following two ways: Required: .. What would EPS, FFO, and ROC be under both approaches? (Round your intermediate calculations and final answers to 2 decimal places.) Aproach Approach Lease commissions Amortize, years Expense in year 1 Finance fees Amortize, 10 years Expense in year 1 Tenant improvements Depreciate, 40 years Depreciate over 5 year lease ter Buildings Depreciate) 40 years Depreciate, 40 years Approach 1 Approach 2 EPS FFO ROC