Step One Directions

Complete pro forma for NOI

Commercial Complex 4 tenants Property will be held for 5 years

Tenant	Lease Type	Size	Current Lease Rate	Rent Growth	CAM
Bank	NNN	Outparcel	$85,135/yr	3.15%
Retailer	Percentage	6,545	$4.05/ sq ft Plus 4.35% revenue	Tenant revenue is expected to grow at 3.5% per year Year 1 Revenues are $580,000	Limited to $4.25 per sq foot Pro rata on sq feet
Office 1		7,860	$33.00/ sq ft	CPI	None
Office 2		5,280	$23.50/ sq ft	CPI	Limited to $6.50 per sq foot Pro rata on sq feet

OP EX Category	Cost	Growth Rate
Utilities	$3.25 per sq ft	3.25% per year
Taxes	$14,680 per year	3.15% per year
Insurance	$0.65 per sq ft	2.0% per year
Maintenance	$2.75 per sq ft	3.15% per year

CPI	Rate
Years 1-3	4.25%
Years 4-7	4.15%
Years 8-10	4.05%

Step Two Questions:

Calculate The Max Debt for this property.

Calculate the amount of equity needed for this property.

Calculation the Net Sale Proceeds to Owner.

Going In Cap Rate	6.25%
Terminal Cap Rate	6.35%
Loan Interest Rate	5.35%
Max loan to value for debt	60%*
Required Debt Service Coverage	1.45*
Discount Rate	12%
Loan Amortization Period	20 years
Loan Term	7 years
Loan Fees	1.25%
Cost of Sale	4%

*Note: The bank will lend on the lessor of these two options.

Make sure to show your work in the uploaded Excel file (be sure to show cash flows through BTCF).