Development_Solution

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Jan 9, 2024

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Transaction Summary Sources & Uses CLOSE Total % of Total Per Unit Uses Acquisition Costs 5,700,000 93% 19,000 Soft Costs – – – Hard Costs – – – Other Development Costs – – – Financing Costs 400,000 7% 1,333 Capital Reserves – – – Total Uses $6,100,000 100% $20,333 Sources Equity 6,100,000 100% 20,333 Debt – – – Operating Cashflow – – – Total Sources $6,100,000 100% $20,333 Returns Summary Peak Equity IRR Profit Multiple Unlevered Project $57,090,929 16.4% $19,459,558 1.34x Levered Project $18,749,450 27.5% $15,915,270 1.85x LP $16,874,505 22.7% $11,449,567 1.68x GP $1,874,945 60.9% $4,465,703 3.38x GP Project $1,874,945 22.7% $1,272,174 1.68x GP Promote n/a n/a $3,193,529 n/a NOI Summary NOI Growth NOI YoC Delta to Exit Cap Year 1 – – (5.50%) Year 2 $728,721 – 1.2% (4.26%) Year 3 $3,639,517 399.4% 6.2% 0.69% Year 4 $4,032,018 10.8% 6.9% 1.35% Year 5 $4,155,646 3.1% 7.1% 1.56% Year 6 $4,283,054 3.1% 7.3% 1.78% Exit Summary Fwd NOI Exit Cap Total $ Per Unit Sale Proceeds $4,032,018 5.50% $73,309,414 $ 244,365 Less: Sale Costs (733,094) Net Sale Proceeds $72,576,320
Less: Outstanding Debt Value (40,000,000) Less: Equity Allocation (18,749,450) Terminal Value Profit 87% $13,826,870 Interim Cash Flow 13% 2,088,400 Total Profit 100% $ 15,915,270 Deal Timetable Start End Acquisition 12/31/2020 Month 0 12/31/2020 Month 0 Soft Costs 3/31/2021 Month 3 10/31/2022 Month 22 Hard Costs 7/31/2021 Month 7 10/31/2022 Month 22 Lease-up 4/30/2022 Month 16 1/31/2023 Month 25 Stabilization 4/30/2022 Month 16 7/31/2023 Month 31 Exit 12/31/2023 Month 36 12/31/2023 Month 36 Revenue & Expense Summary Untrended Month 32 Stabilized Stabilized Year 1 Net Potential Rent 5,328,000 5,545,209 – Concessions (444,000) – – Net Effective Rent $4,884,000 $5,545,209 – Vacancy Loss (341,880) (388,165) – Uncollectible Rent (61,050) (27,726) – Other Revenue 558,000 576,897 – Total Income $5,039,070 $5,706,216 – Operating Expenses (1,661,932) (1,737,919) – NOI $3,377,138 $3,968,297 – Development Cost (20,292,500) Capital Reserves – Unlevered Cash Flow ($20,292,500) Debt Service (24,061) Loan Funding / Payoff (net of fees) 7,670,861 Levered Cash Flow ($12,645,700) Effective Rent $1,357 $1,540 $1,357 Effective Rent Growth Occupancy 93% 93% – Yield-on-Cost 5.7% 6.7% – NOI Margin 67% 70% – DSCR –
HOLD Total % of Total Per Unit 5,700,000 10% 19,000 5,460,000 9% 18,200 44,500,000 76% 148,333 1,750,000 3% 5,833 1,335,700 2% 4,452 75,000 0% 250 $58,820,700 100% $196,069 18,749,450 32% 62,498 40,000,000 68% 133,333 71,250 0% 238 $58,820,700 100% $196,069 Deal Summary Location Boston, MA Vintage 2015 Total Units 300 Hold Period 36 Months Rentable SF 289,000 Avg Unit Size 963 Occupancy 93% Debt Summary Loan Proceeds $40,000,000 Leverage (Close / Life) 0% / 68% Rate 5.16% Fees 1.00% IO Period 36 Months Maturity 12/31/2023 Joint Venture Summary GP Equity 10.0% Pref 10.0% Hurdle #2 20.0% after a 10.0% Hurdle #3 30.0% after a 15.0% Hurdle #4 40.0% after a 20.0%
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Unit Mix Type Count % Studio 15 5% 1 BR, 1 BA 155 52% 2 BR, 2 BA 130 43% 3 BR, 2 BA – – Total 300 100% Lease-up Assumptions Units Leased / Month 30 Concessions 1 Months Concession Burnoff 6 Months Pre-Construction Leasing 6 Months Year 2 Year 3 Year 4 Year 5 1,624,348 5,479,275 5,692,723 5,865,873 (135,362) (263,099) – – $1,488,985 $5,216,176 $5,692,723 $5,865,873 (134,009) (365,132) (398,491) (410,611) (18,612) (65,202) (71,159) (73,323) 170,117 570,716 587,083 598,933 $1,506,482 $5,356,557 $5,810,157 $5,980,871 (777,761) (1,717,040) (1,778,139) (1,825,226) $728,721 $3,639,517 $4,032,018 $4,155,646 (31,417,500) – – – (30,000) (45,000) – – ($30,718,779) $3,594,517 – – (1,202,403) (1,917,824) – – 32,329,139 (40,000,000) – – $407,957 ($38,323,307) – – $1,384 $1,556 $1,603 $1,652 2.0% 12.4% 3.0% 3.0% 91% 93% 93% 93% 1.2% 6.2% 6.9% 7.1% 48% 68% 69% 69% 0.6x 1.9x n/a n/a
Inputs Property Overview Name Multifamily Property Type Development Location Boston, MA Units 300 Year Built 2015 Investment Overview Acquisition Date 12/31/2020 Hold Period 36 Months Exit Date 12/31/2023 Exit Closing Costs 1.00% Exit Cap Rate 5.50% Sale Price $ 244,365/unit $73,309,414 Total Cost $ 195,819/unit $58,745,700 Untrended YoC 5.7% Stabilized YoC 6.7% Unit Mix Type Count % of Total Studio 15 5.0% 1 BR, 1 BA 155 51.7% 2 BR, 2 BA 130 43.3% 3 BR, 2 BA – – Total 300 100% Lease-up Assumptions Timetable Units Leased / Month 30 Concessions 1 Months Acquisition Concession Burnoff 6 Months Soft Costs Pre-Construction Leasing 6 Months Hard Costs Lease-up Stabilization Exit
Drivers Untrended Stabilized Income Assumption Total Stabilized Occupancy 93% Potential Rent / Month $1,480 Effective Rent / Month $1,357 Net Potential Rent 5,328,000 Concessions (444,000) Net Effective Rent 4,884,000 Vacancy Loss (341,880) Non-Revenue Units 0.50% (24,420) Bad Debt 0.75% (36,630) Total Rental Income $4,481,070 Utility Reimbursement 30 108,000 Parking Revenue 100 360,000 Other Revenue 25 90,000 Total Income $5,039,070 Revenue & Expense Assumptions Rent Year Occupancy Growth 1 90% 0.0% 2 91% 2.0% 3 93% 3.0% 4 93% 3.0% 5 93% 3.0% 6 93% 3.0% 7 93% 3.0% 8 93% 3.0% 9 93% 3.0% 10 93% 3.0% 11 93% 3.0%
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Joint Venture Assumptions GP Equity 10.0% Promote Pref Splits Hurdle #1 n/a 10.0% 10.0% Hurdle #2 20.0% 15.0% 28.0% Hurdle #3 30.0% 20.0% 37.0% Hurdle #4 40.0% 500.0% 46.0% Financing Assumptions Start Date Floating 360 12/31/2020 Term 36 Months Maturity Date 12/31/2023 Loan Amount $40,000,000 Loan-to-Cost 68.1% Interest Rate Spread L+ 350 bps All-in Rate 5.16% Fixed Rate 5.00% Interest Only Period 36 Months Amortization Period 30 Years Amortization Rate 5.00% Origination Fee 1.00% Interest Reserve 907,885 Operating Reserve 27,815 Unit Size Total SF Potential Rent Rent PSF 600 9,000 1,000 1.67 800 124,000 1,300 1.63 1,200 156,000 1,750 1.46 – – – – 963 289,000 1,480 1.55 Month Start Duration End Month Month 0 12/31/2020 1 Months 12/31/2020 Month 0 Month 3 3/31/2021 20 Months 10/31/2022 Month 22 Month 7 7/31/2021 16 Months 10/31/2022 Month 22 Month 16 4/30/2022 10 Months 1/31/2023 Month 25 Month 16 4/30/2022 16 Months 7/31/2023 Month 31 Month 36 12/31/2023 1 Months 12/31/2023 Month 36
Untrended Stabilized Operating Expenses % Per Unit Total Repairs & Maintenance 600 180,000 Turnover 250 75,000 Marketing 150 45,000 General & Administrative 375 112,500 Payroll 1,100 330,000 Management Fees 3.0% 448 134,432 Utilities 175 52,500 Real Estate Taxes 2,167 650,000 Property Insurance 275 82,500 Subtotal $5,540 $1,661,932 Capital Reserves 150 45,000 Total $5,690 $1,706,932 Other Revenue Expense RET Growth Growth Growth 0.0% 0.0% 0.0% 2.0% 2.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0% 2.0% 3.0% 2.0%
Checks LIBOR Index S&U - Hold Ok S&U - Close Ok Date LIBOR S&U - Monthly Ok 12/31/2020 1.66% S&U - Summary Ok 1/31/2021 1.63% Summary NOI Ok 2/28/2021 1.60% Debt Paydown Ok 3/31/2021 1.56% Deal Profit Ok 4/30/2021 1.52% Remaining CF Ok 5/31/2021 1.49% IRR Ok 6/30/2021 1.46% YoC Ok 7/31/2021 1.42% Total Profit Ok 8/31/2021 1.39% Debt Draw Ok 9/30/2021 1.35% Dev. Budget Ok 10/31/2021 1.33% Reserves Ok 11/30/2021 1.31% 12/31/2021 1.29% Project Returns 1/31/2022 1.28% IRR 27.5% 2/28/2022 1.26% Profit $15,915,270 3/31/2022 1.25% Multiple 1.8x 4/30/2022 1.24% 5/31/2022 1.23% LP Returns 6/30/2022 1.21% IRR 22.7% 7/31/2022 1.21% Profit $11,449,567 8/31/2022 1.20% Multiple 1.7x 9/30/2022 1.20% 10/31/2022 1.20% GP Returns after Promote 11/30/2022 1.20% IRR 60.9% 12/31/2022 1.20% Profit $4,465,703 1/31/2023 1.21% Multiple 3.4x 2/28/2023 1.21% 3/31/2023 1.22% 4/30/2023 1.22% 5/31/2023 1.23% 6/30/2023 1.23% 7/31/2023 1.23% 8/31/2023 1.23% 9/30/2023 1.24% 10/31/2023 1.24% 11/30/2023 1.24% 12/31/2023 1.24% 1/31/2024 1.25%
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2/29/2024 1.25% 3/31/2024 1.25% 4/30/2024 1.26% 5/31/2024 1.26% 6/30/2024 1.26% 7/31/2024 1.27% 8/31/2024 1.27% 9/30/2024 1.28% 10/31/2024 1.28% 11/30/2024 1.29% 12/31/2024 1.29% 1/31/2025 1.30% 2/28/2025 1.30% 3/31/2025 1.31% 4/30/2025 1.31% 5/31/2025 1.32% 6/30/2025 1.33% 7/31/2025 1.33% 8/31/2025 1.34% 9/30/2025 1.35% 10/31/2025 1.36% 11/30/2025 1.37% 12/31/2025 1.37% 1/31/2026 1.38% 2/28/2026 1.39% 3/31/2026 1.40% 4/30/2026 1.41% 5/31/2026 1.41% 6/30/2026 1.42% 7/31/2026 1.43% 8/31/2026 1.43% 9/30/2026 1.44% 10/31/2026 1.44% 11/30/2026 1.45% 12/31/2026 1.45% 1/31/2027 1.46% 2/28/2027 1.46% 3/31/2027 1.47% 4/30/2027 1.47% 5/31/2027 1.48% 6/30/2027 1.48% 7/31/2027 1.49% 8/31/2027 1.49% 9/30/2027 1.50% 10/31/2027 1.51%
11/30/2027 1.51% 12/31/2027 1.52% 1/31/2028 1.52% 2/29/2028 1.53% 3/31/2028 1.53% 4/30/2028 1.54% 5/31/2028 1.55% 6/30/2028 1.55% 7/31/2028 1.56% 8/31/2028 1.56% 9/30/2028 1.57% 10/31/2028 1.58% 11/30/2028 1.58% 12/31/2028 1.59% 1/31/2029 1.59% 2/28/2029 1.60% 3/31/2029 1.60% 4/30/2029 1.61% 5/31/2029 1.61% 6/30/2029 1.62% 7/31/2029 1.63% 8/31/2029 1.63% 9/30/2029 1.64% 10/31/2029 1.64% 11/30/2029 1.65% 12/31/2029 1.65% 1/31/2030 1.66% 2/28/2030 1.66% 3/31/2030 1.67% 4/30/2030 1.67% 5/31/2030 1.68% 6/30/2030 1.68% 7/31/2030 1.68% 8/31/2030 1.69% 9/30/2030 1.69% 10/31/2030 1.69% 11/30/2030 1.69% 12/31/2030 1.69%
Amortization Table PMT 214,729 Date Period Payment Beg. Balance Principal Interest End Balance 12/31/2020 0 40,000,000 1/31/2021 1 177,602 40,000,000 – 177,602 40,000,000 2/28/2021 2 160,415 40,000,000 – 160,415 40,000,000 3/31/2021 3 177,602 40,000,000 – 177,602 40,000,000 4/30/2021 4 171,873 40,000,000 – 171,873 40,000,000 5/31/2021 5 177,602 40,000,000 – 177,602 40,000,000 6/30/2021 6 171,873 40,000,000 – 171,873 40,000,000 7/31/2021 7 177,602 40,000,000 – 177,602 40,000,000 8/31/2021 8 177,602 40,000,000 – 177,602 40,000,000 9/30/2021 9 171,873 40,000,000 – 171,873 40,000,000 10/31/2021 10 177,602 40,000,000 – 177,602 40,000,000 11/30/2021 11 171,873 40,000,000 – 171,873 40,000,000 12/31/2021 12 177,602 40,000,000 – 177,602 40,000,000 1/31/2022 13 177,602 40,000,000 – 177,602 40,000,000 2/28/2022 14 160,415 40,000,000 – 160,415 40,000,000 3/31/2022 15 177,602 40,000,000 – 177,602 40,000,000 4/30/2022 16 171,873 40,000,000 – 171,873 40,000,000 5/31/2022 17 177,602 40,000,000 – 177,602 40,000,000 6/30/2022 18 171,873 40,000,000 – 171,873 40,000,000 7/31/2022 19 177,602 40,000,000 – 177,602 40,000,000 8/31/2022 20 177,602 40,000,000 – 177,602 40,000,000 9/30/2022 21 171,873 40,000,000 – 171,873 40,000,000 10/31/2022 22 177,602 40,000,000 – 177,602 40,000,000 11/30/2022 23 171,873 40,000,000 – 171,873 40,000,000 12/31/2022 24 177,602 40,000,000 – 177,602 40,000,000 1/31/2023 25 177,602 40,000,000 – 177,602 40,000,000 2/28/2023 26 160,415 40,000,000 – 160,415 40,000,000 3/31/2023 27 177,602 40,000,000 – 177,602 40,000,000 4/30/2023 28 171,873 40,000,000 – 171,873 40,000,000 5/31/2023 29 177,602 40,000,000 – 177,602 40,000,000 6/30/2023 30 171,873 40,000,000 – 171,873 40,000,000 7/31/2023 31 177,602 40,000,000 – 177,602 40,000,000 8/31/2023 32 177,602 40,000,000 – 177,602 40,000,000 9/30/2023 33 171,873 40,000,000 – 171,873 40,000,000 10/31/2023 34 177,602 40,000,000 – 177,602 40,000,000 11/30/2023 35 171,873 40,000,000 – 171,873 40,000,000
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12/31/2023 36 177,602 40,000,000 – 177,602 40,000,000 1/31/2024 37 214,729 40,000,000 37,126 177,602 39,962,874 2/29/2024 38 214,729 39,962,874 48,739 165,990 39,914,135 3/31/2024 39 214,729 39,914,135 37,507 177,221 39,876,628 4/30/2024 40 214,729 39,876,628 43,385 171,343 39,833,242 5/31/2024 41 214,729 39,833,242 37,867 176,862 39,795,376 6/30/2024 42 214,729 39,795,376 43,735 170,994 39,751,641 7/31/2024 43 214,729 39,751,641 38,229 176,500 39,713,412 8/31/2024 44 214,729 39,713,412 38,399 176,330 39,675,014 9/30/2024 45 214,729 39,675,014 44,252 170,477 39,630,762 10/31/2024 46 214,729 39,630,762 38,766 175,963 39,591,996 11/30/2024 47 214,729 39,591,996 44,608 170,120 39,547,388 12/31/2024 48 214,729 39,547,388 39,136 175,593 39,508,252 1/31/2025 49 214,729 39,508,252 39,310 175,419 39,468,942 2/28/2025 50 214,729 39,468,942 56,443 158,285 39,412,499 3/31/2025 51 214,729 39,412,499 39,735 174,994 39,372,764 4/30/2025 52 214,729 39,372,764 45,550 169,178 39,327,214 5/31/2025 53 214,729 39,327,214 40,113 174,615 39,287,100 6/30/2025 54 214,729 39,287,100 45,919 168,810 39,241,182 7/31/2025 55 214,729 39,241,182 40,495 174,233 39,200,686 8/31/2025 56 214,729 39,200,686 40,675 174,053 39,160,011 9/30/2025 57 214,729 39,160,011 46,465 168,264 39,113,547 10/31/2025 58 214,729 39,113,547 41,062 173,667 39,072,485 11/30/2025 59 214,729 39,072,485 46,841 167,888 39,025,644 12/31/2025 60 214,729 39,025,644 41,452 173,276 38,984,191 1/31/2026 61 214,729 38,984,191 41,636 173,092 38,942,555 2/28/2026 62 214,729 38,942,555 58,554 156,174 38,884,001 3/31/2026 63 214,729 38,884,001 42,081 172,647 38,841,919 4/30/2026 64 214,729 38,841,919 47,831 166,897 38,794,088 5/31/2026 65 214,729 38,794,088 42,481 172,248 38,751,607 6/30/2026 66 214,729 38,751,607 48,219 166,509 38,703,388 7/31/2026 67 214,729 38,703,388 42,883 171,845 38,660,505 8/31/2026 68 214,729 38,660,505 43,074 171,655 38,617,431 9/30/2026 69 214,729 38,617,431 48,796 165,933 38,568,635 10/31/2026 70 214,729 38,568,635 43,482 171,247 38,525,154 11/30/2026 71 214,729 38,525,154 49,192 165,536 38,475,961 12/31/2026 72 214,729 38,475,961 43,893 170,836 38,432,068 1/31/2027 73 214,729 38,432,068 44,088 170,641 38,387,980 2/28/2027 74 214,729 38,387,980 60,778 153,950 38,327,202 3/31/2027 75 214,729 38,327,202 44,554 170,175 38,282,648 4/30/2027 76 214,729 38,282,648 50,234 164,494 38,232,414 5/31/2027 77 214,729 38,232,414 44,974 169,754 38,187,439 6/30/2027 78 214,729 38,187,439 50,644 164,085 38,136,796 7/31/2027 79 214,729 38,136,796 45,399 169,330 38,091,397 8/31/2027 80 214,729 38,091,397 45,601 169,128 38,045,796
9/30/2027 81 214,729 38,045,796 51,252 163,476 37,994,544 10/31/2027 82 214,729 37,994,544 46,031 168,698 37,948,514 11/30/2027 83 214,729 37,948,514 51,670 163,058 37,896,843 12/31/2027 84 214,729 37,896,843 46,464 168,264 37,850,379 1/31/2028 85 214,729 37,850,379 46,671 168,058 37,803,708 2/29/2028 86 214,729 37,803,708 57,707 157,022 37,746,001 3/31/2028 87 214,729 37,746,001 47,134 167,595 37,698,867 4/30/2028 88 214,729 37,698,867 52,743 161,986 37,646,124 5/31/2028 89 214,729 37,646,124 47,578 167,151 37,598,547 6/30/2028 90 214,729 37,598,547 53,174 161,555 37,545,373 7/31/2028 91 214,729 37,545,373 48,025 166,704 37,497,348 8/31/2028 92 214,729 37,497,348 48,238 166,491 37,449,110 9/30/2028 93 214,729 37,449,110 53,816 160,913 37,395,294 10/31/2028 94 214,729 37,395,294 48,691 166,037 37,346,603 11/30/2028 95 214,729 37,346,603 54,257 160,472 37,292,346 12/31/2028 96 214,729 37,292,346 49,148 165,580 37,243,198 1/31/2029 97 214,729 37,243,198 49,367 165,362 37,193,831 2/28/2029 98 214,729 37,193,831 65,567 149,161 37,128,264 3/31/2029 99 214,729 37,128,264 49,877 164,852 37,078,387 4/30/2029 100 214,729 37,078,387 55,409 159,320 37,022,978 5/31/2029 101 214,729 37,022,978 50,344 164,384 36,972,633 6/30/2029 102 214,729 36,972,633 55,863 158,865 36,916,770 7/31/2029 103 214,729 36,916,770 50,816 163,913 36,865,954 8/31/2029 104 214,729 36,865,954 51,042 163,687 36,814,913 9/30/2029 105 214,729 36,814,913 56,541 158,188 36,758,371 10/31/2029 106 214,729 36,758,371 51,519 163,209 36,706,852 11/30/2029 107 214,729 36,706,852 57,005 157,723 36,649,847 12/31/2029 108 214,729 36,649,847 52,001 162,728 36,597,846 1/31/2030 109 214,729 36,597,846 52,232 162,497 36,545,614 2/28/2030 110 214,729 36,545,614 68,167 146,562 36,477,447 3/31/2030 111 214,729 36,477,447 52,767 161,962 36,424,680 4/30/2030 112 214,729 36,424,680 58,218 156,511 36,366,462 5/31/2030 113 214,729 36,366,462 53,259 161,469 36,313,203 6/30/2030 114 214,729 36,313,203 58,697 156,032 36,254,506 7/31/2030 115 214,729 36,254,506 53,756 160,972 36,200,750 8/31/2030 116 214,729 36,200,750 53,995 160,734 36,146,755 9/30/2030 117 214,729 36,146,755 59,412 155,317 36,087,343 10/31/2030 118 214,729 36,087,343 54,499 160,230 36,032,844 11/30/2030 119 214,729 36,032,844 59,902 154,827 35,972,942 12/31/2030 120 214,729 35,972,942 55,007 159,722 35,917,936
Sensitivity Tables Exit Cap Annual Rent Growth - Steady 27.5%, $15. 2.50% 2.75% 3.00% #NAME? #NAME? #NAME? 5.25% 5.50% 5.75% #NAME? #NAME? #NAME? Exit Cap Hold Period 27.5%, $15. 36 Months 48 Months 60 Months #NAME? #NAME? #NAME? 5.25% 5.50% 5.75% #NAME? #NAME? #NAME? Exit Cap Renovation Premium 27.5%, $15. $75 $100 $125 #NAME? #NAME? 5.00% 5.25% 5.50% 5.75% #NAME? #NAME? #NAME?
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State 3.25% 3.50% 72 Months 84 Months $150 $175
Model Acq Date 12/31/2020 Exit Date 12/31/2023 Year 0 Size 300 Total 12/31/2020 INCOME Net Potential Rent 7,103,623 – Concessions (398,461) – Net Effective Rent 6,705,161 – Vacancy Loss (499,141) – Non-Revenue Units (33,526) – Bad Debt (50,289) – Total Rental Income $6,122,206 – Effective Rent / Month Effective Rent PSF / Month Physical Occupancy Economic Occupancy Utility Reimbursement 143,387 – Parking Revenue 477,957 – Other Revenue 119,489 – Total Other Revenue $740,833 – TOTAL INCOME $6,863,039 – OPERATING EXPENSES Repairs & Maintenance (239,987) – Turnover (99,995) – Marketing (59,997) – General & Administrative (149,992) – Payroll (439,977) – Management Fees (183,666) – Utilities (69,996) – Real Estate Taxes (1,109,862) – Property Insurance (141,330) – TOTAL OPERATING EXPENSES ($2,494,801) – NET OPERATING INCOME $4,368,238 – Forward 12 Month NOI Margin Yield-on-Cost CAPITAL EXPENDITURES
Capital Reserves (75,000) – TOTAL CAPITAL EXPENDITURES ($75,000) – DEVELOPMENT & SALE Acquisition Costs (5,700,000) (5,700,000) Soft Costs (5,460,000) – Hard Costs (44,500,000) – Other Development Costs (1,750,000) – Sale Proceeds 73,309,414 – Exit Closing Costs (733,094) – TOTAL DEVELOPMENT & SALE $15,166,320 ($5,700,000) UNLEVERED CASH FLOW $19,459,558 ($5,700,000) Peak Equity $57,090,929 IRR 16.4% Profit $19,459,558 Multiple 1.34x FINANCING COSTS LIBOR Index Interest Rate Spread All-in Rate Floating Interest Expense (3,144,288) – Financing Fees (400,000) (400,000) Beginning Balance – – Loan Funding 40,000,000 – Amortization – – Loan Payoff (40,000,000) – Ending Balance – – DSCR n/a Debt Yield n/a LEVERED CASH FLOW $15,915,270 ($6,100,000) Cash-on-Cash Peak Equity $18,749,450 IRR 27.5% Profit $15,915,270 Multiple 1.85x USES Close Hold
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Acquisition Costs 5,700,000 5,700,000 5,700,000 Soft Costs – 5,460,000 – Hard Costs – 44,500,000 – Other Development Costs – 1,750,000 – Financing Costs 400,000 1,335,700 400,000 Capital Expenditures – 75,000 – Total Uses $6,100,000 $58,820,700 $6,100,000 SOURCES Equity 6,100,000 18,749,450 6,100,000 Debt – 40,000,000 – Operating Cash Flow – 71,250 – Total Sources $6,100,000 $58,820,700 $6,100,000 Check Ok Ok Ok WATERFALL LP Equity % 90.0% GP Equity % 10.0% Hurdle #1: Parri Passu Un 10.0% Beginning Balance Preferred Returns Payoff Equity Infusions Ending Balance LP Cash Flows Ok GP Cash Flows Ok Remaining Cash Flow Hurdle #2: 20.0% Promot 15.0% 20.0% Beginning Balance Preferred Returns Previous Payoff Current Payoff Equity Infusions Ending Balance LP Hurdle #2 Cash Flows GP Hurdle #2 Cash Flows
Promote Hurdle #2 Cash Flows LP Cash Flows Ok GP Cash Flows Ok Promote Cash Flows Remaining Cash Flow Hurdle #3: 30.0% Promot 20.0% 30.0% Beginning Balance Preferred Returns Previous Payoff Current Payoff Equity Infusions Ending Balance LP Hurdle #3 Cash Flows GP Hurdle #3 Cash Flows Promote Hurdle #3 Cash Flows LP Cash Flows Ok GP Cash Flows Ok Promote Cash Flows Remaining Cash Flow Hurdle #4: 40.0% Promot 500.0% 40.0% Beginning Balance Preferred Returns Previous Payoff Current Payoff Equity Infusions Ending Balance LP Hurdle #4 Cash Flows GP Hurdle #4 Cash Flows Promote Hurdle #4 Cash Flows LP Cash Flows Check GP Cash Flows Check Promote Cash Flows Remaining Cash Flow Ok
TOTAL CASH FLOWS LP Cash Flows Peak Equity $16,874,505 IRR 22.7% Profit $11,449,567 Multiple 1.68x GP Cash Flows Before Promote Peak Equity $1,874,945 IRR 22.7% Profit $1,272,174 Multiple 1.68x GP Cash Flows After Promote Peak Equity $1,874,945 IRR 60.9% Profit $4,465,703 Multiple 3.38x
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Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 12/31/2026 12/31/2027 – $1,624,348 $5,479,275 $5,692,723 $5,865,873 $6,044,289 $6,228,132 – (135,362) (263,099) – – – – – 1,488,985 5,216,176 5,692,723 5,865,873 6,044,289 6,228,132 – (134,009) (365,132) (398,491) (410,611) (423,100) (435,969) – (7,445) (26,081) (28,464) (29,329) (30,221) (31,141) – (11,167) (39,121) (42,695) (43,994) (45,332) (46,711) – $1,336,364 $4,785,841 $5,223,073 $5,381,938 $5,545,635 $5,714,311 $1,357 $1,384 $1,556 $1,603 $1,652 $1,702 $1,754 $1.41 $1.44 $1.62 $1.66 $1.71 $1.77 $1.82 – 91% 93% 93% 93% 93% 93% – 90% 92% 92% 92% 92% 92% – 32,926 110,461 113,629 115,923 118,262 120,649 – 109,753 368,204 378,763 386,408 394,208 402,165 – 27,438 92,051 94,691 96,602 98,552 100,541 – $170,117 $570,716 $587,083 $598,933 $611,022 $623,355 – $1,506,482 $5,356,557 $5,810,157 $5,980,871 $6,156,657 $6,337,666 – (54,877) (185,111) (192,322) (198,171) (204,199) (210,410) – (22,865) (77,129) (80,134) (82,571) (85,083) (87,671) – (13,719) (46,278) (48,080) (49,543) (51,050) (52,602) – (34,298) (115,694) (120,201) (123,857) (127,624) (131,506) – (100,607) (339,370) (352,590) (363,314) (374,365) (385,751) – (40,091) (143,575) (156,692) (161,458) (166,369) (171,429) – (16,006) (53,991) (56,094) (57,800) (59,558) (61,370) – (439,514) (670,348) (683,878) (697,682) (711,764) (726,131) – (55,784) (85,546) (88,147) (90,829) (93,591) (96,438) – ($777,761) ($1,717,040) ($1,778,139) ($1,825,226) ($1,873,603) ($1,923,308) – $728,721 $3,639,517 $4,032,018 $4,155,646 $4,283,054 $4,414,358 – 48% 68% 69% 69% 70% 70% – 1.2% 6.2% 6.9% 7.1% 7.3% 7.5%
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– (30,000) (45,000) – – – – – ($30,000) ($45,000) – – – – – – – – – – – (2,730,000) (2,730,000) – – – – – (16,687,500) (27,812,500) – – – – – (875,000) (875,000) – – – – – – – 73,309,414 – – – – – – (733,094) – – – – ($20,292,500) ($31,417,500) $72,576,320 – – – – ($20,292,500) ($30,718,779) $76,170,837 – – – – (24,061) (1,202,403) (1,917,824) – – – – – – – – – – – – 7,670,861 40,000,000 – – – – 7,670,861 32,329,139 – – – – – – – – – – – – – – (40,000,000) – – – – $7,670,861 $40,000,000 – – – – – – 0.6x 1.9x n/a n/a n/a n/a – 1.8% n/a n/a n/a n/a n/a ($12,645,700) $407,957 $34,253,013 – – – – 40.8% 169.7% 8.9% – – – –
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5,700,000 5,700,000 5,700,000 5,700,000 5,700,000 5,700,000 5,700,000 2,730,000 5,460,000 5,460,000 5,460,000 5,460,000 5,460,000 5,460,000 16,687,500 44,500,000 44,500,000 44,500,000 44,500,000 44,500,000 44,500,000 875,000 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 1,750,000 424,061 1,335,700 1,335,700 1,335,700 1,335,700 1,335,700 1,335,700 – 30,000 75,000 75,000 75,000 75,000 75,000 $26,416,561 $58,775,700 $58,820,700 $58,820,700 $58,820,700 $58,820,700 $58,820,700 18,745,700 18,749,450 18,749,450 18,749,450 18,749,450 18,749,450 18,749,450 7,670,861 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000 – 26,250 71,250 71,250 71,250 71,250 71,250 $26,416,561 $58,775,700 $58,820,700 $58,820,700 $58,820,700 $58,820,700 $58,820,700 Ok Ok Ok Ok Ok Ok Ok
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Year 8 Year 9 Year 10 Year 11 12/31/2028 12/31/2029 12/31/2030 12/31/2031 $6,417,566 $6,612,763 $6,813,896 $7,021,147 – – – – 6,417,566 6,612,763 6,813,896 7,021,147 (449,230) (462,893) (476,973) (491,480) (32,088) (33,064) (34,069) (35,106) (48,132) (49,596) (51,104) (52,659) $5,888,117 $6,067,210 $6,251,750 $6,441,903 $1,807 $1,862 $1,919 $1,977 $1.88 $1.93 $1.99 $2.05 93% 93% 93% 93% 92% 92% 92% 92% 123,085 125,569 128,104 130,689 410,282 418,563 427,012 435,631 102,571 104,641 106,753 108,908 $635,937 $648,773 $661,868 $675,228 $6,524,054 $6,715,983 $6,913,618 $7,117,130 (216,810) (223,404) (230,199) (237,201) (90,337) (93,085) (95,916) (98,834) (54,202) (55,851) (57,550) (59,300) (135,506) (139,628) (143,874) (148,251) (397,484) (409,574) (422,032) (434,868) (176,644) (182,016) (187,552) (193,257) (63,236) (65,160) (67,141) (69,184) (740,787) (755,739) (770,994) (786,556) (99,371) (102,394) (105,508) (108,717) ($1,974,378) ($2,026,851) ($2,080,767) ($2,136,167) $4,549,677 $4,689,132 $4,832,851 $4,980,963 70% 70% 70% 70% 7.7% 8.0% 8.2% 8.5%
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– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – n/a n/a n/a n/a n/a n/a n/a n/a – – – – – – – –
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5,700,000 5,700,000 5,700,000 5,700,000 5,460,000 5,460,000 5,460,000 5,460,000 44,500,000 44,500,000 44,500,000 44,500,000 1,750,000 1,750,000 1,750,000 1,750,000 1,335,700 1,335,700 1,335,700 1,335,700 75,000 75,000 75,000 75,000 $58,820,700 $58,820,700 $58,820,700 $58,820,700 18,749,450 18,749,450 18,749,450 18,749,450 40,000,000 40,000,000 40,000,000 40,000,000 71,250 71,250 71,250 71,250 $58,820,700 $58,820,700 $58,820,700 $58,820,700 Ok Ok Ok Ok
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Development Budget % Total Total Cost Land Purchase Price 8.5% 5,000,000 Land Mark-up – – Closing Costs 1.2% 700,000 Acquisition Costs 9.7% 5,700,000 Permitting Fees 5.3% 3,135,000 A&E 3.5% 2,075,000 Legal 0.4% 250,000 Contingency – – Soft Costs 9.3% 5,460,000 Site Development 0.3% 150,000 Shell Construction 71.5% 42,000,000 FF&E 1.2% 700,000 Contingency 2.8% 1,650,000 Hard Costs 75.8% 44,500,000 Development Fee 3.0% 1,750,000 Additional Contingency – – Other Development Costs 3.0% 1,750,000 Total Unlevered Costs 98% $57,410,000 Financing Fees 0.7% 400,000 Interest Reserve 1.5% 907,885 Operating Reserve 0.0% 27,815 Financing Costs 2.3% 1,335,700 Total Development Costs 100% $58,745,700 Contingencies Soft Cost Contingency % of Soft Costs – Hard Cost Contingency % of Hard Costs 1,650,000 Additional Contingency – Total % of Total Development Costs 1,650,000 Fees Development Fee % of Land + Hard + Soft Costs (excl. contingency) Sources of Financing
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Equity Debt Total
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$ / Unit 16,667 – 2,333 19,000 10,450 6,917 833 – 18,200 500 140,000 2,333 5,500 148,333 5,833 – 5,833 $191,367 1,333 3,026 93 4,452 $195,819 – 2.8% – 2.8% 3.2%
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18,745,700 40,000,000 $58,745,700
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F Question Viewer Cost of Goods Sold - Depreciation = EBIT - Taxes (20%). = Unlevered net income + Depreciation - Additions to Net Working Capital - Capital Expenditures = Free Cash Flow Year 0 A. 17% B. 30% C. 25% D. 22% _-400000_ Year 1 424897.541 - 165000 - 85000 174897.541 - 34979.508 139918.033 85000 - 20000 Year 2 424897.541 - 165000 - 85000 174897.541 - 34979.508 139918.033 85000 - 20000 Year 3 424897.541 - 165000 - 85000 174897.541 - 34979.508 139918.033 85000 - 20000 204918.033 204918.033 204918.033 Visby Rides, a livery car company, is considering buying some new luxury cars. After extensive research, they come up with the above estimates of free cash flow from this project. By how much could the discount rate rise before the net present value (NPV) of this project is zero, given that it is currently 8%?
Q6   Selected data from Box Division's accounting records revealed the following:   Sales $ 825,000 Average investment $ 440,000 Net operating income $ 66,000 Minimum rate of return (divisional cost of capital) 14%   Box Division's asset turnover (AT) is calculated to be: (Round your answer to three decimal places.)   Multiple Choice   4.270.   1.070.   1.875.   12.500.   1.625.
None
INCOME STATEMENT Hermann Industries is forecasting the following income statement:Sales $8,000,000Operating costs excluding depr. & amort. 4,400,000EBITDA $3,600,000Depreciation & amortization 800,000EBIT $2,800,000Interest 600,000EBT $2,200,000Taxes (40%) 880,000Net income $1,320,000The CEO would like to see higher sales and a forecasted net income of $2,500,000. Assumethat operating costs (excluding depreciation and amortization) are 55% of sales and thatdepreciation and amortization and interest expenses will increase by 10%. The tax rate, whichis 40%, will remain the same. What level of sales would generate $2,500,000 in net income?
Market Values and Book Values [L LO1] Klingon Widgets, Inc., purchased new cloaking machinery three years ago for $6 million. The machinery can be sold to the Romulans today for $5.4 million. Klingon's current balance sheet shows net fixed assets of $3.5 million, current liabilities of $945,000, and net working capital of $275,000. If the current assets and current liabilities were liquidated today, the company would receive a total of $1.25 million cash. What is the book value of Klingon's total assets today? What is the sum of the market value of NWC and the market value of fixed assets?
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Use the table for the question(s) below. Name Gannet New York Times McClatchy Media General Lee Enterprises Average Maximum Minimum Enterprise ($ OA. $3.17 OB. $0.32 C. $0.19 D. $3.49 Market Capitalization (S Value million) 6350 2423 675 326 267 million) 10,163 3472 3061 1192 1724 Price/ Enterprise Value/ Enterprise Value/ Book 0.73 P/E 7.36 18.09 2.64 9.76 1.68 14.89 0.39 6.55 0.82 11.33 1.25 +60% 112% 40% -69% Sales 1.4 1.10 1.40 1.31 1.57 1.35 +16% 18% EBITDA 5.04 7.21 5.64 7.65 6.65 6.44 +22% 19% The table above shows the stock prices and multiples for a number of firms in the newspaper publishing industry. Another newspaper publishing firm (not shown) had sales of $620 million, EBITDA of $80 million, excess cash of $60 million, $15 million of debt, and 120 million shares outstanding. If the firm had an EPS of $0.44, what is the difference between the estimated share price of this firm if the average price - earnings ratio is used and the estimated share price if the average…
Sales Operating Income Total Assets (investment) Target Rate of Return (Cost of Capital) $1,520,437 $77,792 $500,251 12% What is return on investment? Input your answer to 1 decimal place. For example if you calculate.1892 enter 18.9.
Company: Revenues Operating expenses Gain from disposal of discontinued component Restructuring costs Interest expense Unrealized gain on AFS Debt Investment (OCI) Gain on sale of operating assets A. $240,000. B. $88,000 C. $46,400 D. $72,000 E. $80,000 nglish (United States) Text Predictions On Debits Accessibility: Investigate 420,000 100,000 20,000 Income tax expense has not yet been accrued. The company's income tax rate is 20% on all items. What amount should be reported in the company's Year 6 income statement as income from continuing operations? I Credits $600.000 200,000 10,000 30,000 Focus
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The following are available for divison X and Y    Profit before interest and tax  X 185 000  Y172 000 Capital employed  X 1 540 000  Y 1 650 000 The cost of capital is 10% comment on the performance of the departments based on  a. Return on capital employed b.residual income
Average Rate of Return Method, Net Present Value Method, and analysis for a Service CompanyThe capital investment committee of Ellis Transport and Storage Inc. is considering two investmentprojects. The estimated income from operations and net cash flows from each investment are as follows:Warehouse Tracking TechnologyYear Income from Operations Net Cash Flow Income from Operations Net Cash Flow1 $ 61,400 $135,000 $ 34,400 $108,0002 51,400 125,000 34,400 108,0003 36,400 110,000 34,400 108,0004 26,400 100,000 34,400 108,0005 (3,600) 70,000 34,400 108,000Total $172,000 $540,000 $172,000 $540,000Each project requires an investment of $368,000. Straight-line depreciation will be used, and no residualvalue is expected. The committee has selected a rate of 15% for purposes of the net present valueanalysis.Present Value of $1 at Compound InterestYear 6% 10% 12% 15% 20%1 0.943 0.909 0.893 0.870 0.8332 0.890 0.826 0.797 0.756 0.6943 0.840 0.751 0.712 0.658 0.5794 0.792 0.683 0.636 0.572 0.4825…
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Selected data from an investment center of IROL Inc. follow:Sales $8,000,000Net book value of assets, beginning 2,500,000Net book value of assets, ending 2,600,000Net operating income 640,000Minimum rate of return 12%Required1. Calculate return on sales (ROS), asset turnover (AT), and return on investment (ROI).2. Calculate residual income (RI).
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