UPLOAD YOUR ANSWERS TO THESE QUESTIONS IN THE UPLOAD BOX AT THE END OF THE QUESTION. Yоu must shоw yоur work in order to receive pаrtiаl credit. Feel free to re-use cаlculations from previous questions rather than rewriting them. You are considering purchasing a warehouse property near Philadelphia. The warehouse has 80,000 square feet, and is occupied by two tenants each leasing 40,000 square feet. Here is the key information about the property, your financing, and your tax situation: Investment:$30,000,000 acquisition price, of which 25% is attributable to land. Assume the purchase occurs at the end of 2026 and the first year of positive cash flows is 2027. Assume all cash flows are at the end of the year. Sale:10-year holding period (you sell at the end of 2036). Assume the exit cap rate will be 4.5%. There are no sales expenses. Tenants’ Leases:The two tenants each pay $600,000 per year, triple-net, and no escalations, for a total of $1.2mm. Tenant A has 11 years remaining in its lease term. Tenant B has 5 years remaining in its lease term. Replacement reserve:$50,000 per year, paid by you. Assume you set it aside and spend it right before the sale of the property. (This means that you neither expense it nor depreciate it – this is how we treated it in the class example.) Taxes: Your income tax rate is 29.6% and the depreciation lifetime is 39 years, straight-line. Financing:$15,000,000 loan amount. 6.0% interest rate, 30-year amortization schedule, 10-year term, annual payments, non-recourse, non-assumable, no fees. Here is the amortization schedule: Market:The rental market for this warehouse location is highly variable and depends on whether a tenant happens to be looking for your size space when you have it available. Market rents are expected to rise on average. 1) (9 points.) What are NOI after reserves, BTCF from operations, and ATCF from operations in 2029? 2) (6 points.) How much would you project the BTCF from sale (not ATCF!) would be at the end of 2036, assuming that 2037 NOI after reserves is expected to be $1,380,000? 3) (12 points.) The IRR on this deal is about the same as the yield from investing in 10-year corporate bonds of Tenant A and Tenant B. Given that, do you think that this property is underpriced, overpriced, or just-right, and why? If you have more than reason, be sure to list them all.
Which strаtegy mоst effectively helps students preview а chаpter befоre reading?