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	$52,230/yr	3.0%
Retailer	Percentage	4,250	$3.75/ sq ft Plus 5.25% revenue	Tenant revenue is expected to grow at 2.5% per year Year 1 Revenues are $305,000	Limited to $2.15 per sq foot Pro rata on sq feet
Office		10,600	$22.00/ sq ft	CPI	None
Office		2,350	$18.75/ sq ft	CPI	Limited to $7.50 per sq foot Pro rata on sq feet

OP EX Category	Cost	Growth Rate
Utilities	$3.15 per sq ft	2.85% per year
Taxes	$10,627 per year	2.75% per year
Insurance	$2.45 per sq ft	2.0% per year
Maintenance	$3.12 per sq ft	3.15% per year

CPI	Rate
Years 1-3	2.75%
Years 4-7	3.15%
Years 8-10	3.25%

Step Two Questions:

1. Calculate The Max Debt for this property.
2. Calculate the amount of equity needed for this property.
3. Calculation the Net Sale Proceeds to Owner.

Going In Cap Rate	6.15%
Terminal Cap Rate	5.25%
Loan Interest Rate	3.25%
Max loan to value for debt	65%
Required Debt Service Coverage	1.54
Discount Rate	12%
Loan Amortization Period	20 years
Loan Term	7 years
Loan Fees	1.75%
Cost of Sale	4%