You are a Real Estate developer building a small office tower in Montreal. The construction will...

   

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You are a Real Estate developer building a small office tower in Montreal. The construction will take one year and the units have all been pre-leased. The stabilized NOI at opening will be $750,000 and comparable cap rates are 6%. The construction lender is willing to finance the project based on the terms and conditions shown below. a) Based on the budget, calculate the oustanding construction loan at the end of the year. b) How much equity will you be able to withdraw at the end of the construction period if you take-out a mortgage with the terms and conditions shown below? Please make your calculations to the right of the data on this worksheet. Development Budget: Land Site preparation Hard costs Professional fees Permits Project management Leasing commissions Other soft costs 2,000,000 250,000 7,000,000 300,000 125,000 150,000 16,000 195,000 10,036,000 Interest TO TAL 113,000 10,149.000 Cash flow: The land is purchased and site preparation occur in the first month. The soft cost (excluding interest) are evenly distributed over the 12 month period. The hard costs are evenly distibuted over month 3 to month 12. All cash flows occur at the end of the month. Construction loan: LTC Interest rate 65.0% 5.5% Stabilized NOI at opening Comparable cap rates 700,000 5.0% Mortgage loan: Tem (years) Amortization period (years) 25 4.0% 75.0% Mortgage rate Maximum LTV Minimum DSCR 1.25 You are a Real Estate developer building a small office tower in Montreal. The construction will take one year and the units have all been pre-leased. The stabilized NOI at opening will be $750,000 and comparable cap rates are 6%. The construction lender is willing to finance the project based on the terms and conditions shown below. a) Based on the budget, calculate the oustanding construction loan at the end of the year. b) How much equity will you be able to withdraw at the end of the construction period if you take-out a mortgage with the terms and conditions shown below? Please make your calculations to the right of the data on this worksheet. Development Budget: Land Site preparation Hard costs Professional fees Permits Project management Leasing commissions Other soft costs 2,000,000 250,000 7,000,000 300,000 125,000 150,000 16,000 195,000 10,036,000 Interest TO TAL 113,000 10,149.000 Cash flow: The land is purchased and site preparation occur in the first month. The soft cost (excluding interest) are evenly distributed over the 12 month period. The hard costs are evenly distibuted over month 3 to month 12. All cash flows occur at the end of the month. Construction loan: LTC Interest rate 65.0% 5.5% Stabilized NOI at opening Comparable cap rates 700,000 5.0% Mortgage loan: Tem (years) Amortization period (years) 25 4.0% 75.0% Mortgage rate Maximum LTV Minimum DSCR 1.25

Answer rating: 100% (QA)

ATotal Development costs Land Costs Monthly Developmen... View the full answer