Cost Comparison Analysis
Introduction
This analysis of four
alternatives for satisfying a user need for space was prepared using planEASe
software, given the following specifications.
Since the analysis involves after tax benefits for two of the leases and the
purchase, we decided to perform the analysis after tax, assuming a 34%
corporate tax rate for the client (planEASe performs analysis before tax as
well, where appropriate). We also assumed the client has a 10% after tax Cost
of Capital. To establish a common time frame for the analysis, we decided to
use 10 years, ignoring the 11th year for Whale Point.
We assumed that the meaning of the 3% annual increases for the 1000 Ocean Blvd.
lease meant that it was tied to the CPI, and expected to be 3%. This 3%
Inflation Rate was also used for the growth in Utilities & Taxes for the
Beach Overlook purchase. No assumption was given for the reversionary value of
the Beach Overlook purchase, so we assumed that its value would increase at the
3% Inflation Rate as well, and tested this major assumption at the conclusion
of the analysis when we compared the alternatives while varying the Inflation
Rate.
Throughout the assumptions for all four alternatives, you will find that what
would normally be expenses are instead entered as negative revenues. The end
results are the same using either method, but using negative revenues is
recommended because it allows you to view the expenses planned using the
planEASe Lease Analysis capability, although that reporting is not necessary
(or shown) for these simple leases.
You may wonder about the color presentation in this report package. planEASe is
shipped with many page "styles" (this one is called
"Influential") that allow you to present your planEASe reports in
pre-defined colors and fonts. You may choose any of these styles before
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defining your own styles, choosing (and saving) your own choices of colors and
fonts as your own style.
We maintain an extensive website at www.planease.com, describing the product,
the many classes constantly scheduled throughout the nation, and many tutorials
available 24/7 to support the product. For instance, if you click on
Tutorials/Presentation/color Printing at the website, you will find a full
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planEASe measures NPV's using a mid-year convention for placing the Cash Flows
in time. This is explained in the NPV Verification Report on the last page of
this package. If you care to verify our calculations using EXCEL, be sure to
use the new XNPV function that allows unequal time periods.
Other than the NPV Verification Report mentioned above, all the reports in this
package (these pages as well) were prepared by planEASe plus the Reporting
Extension, priced at $1,395. No additional software (other than Windows itself)
is required. Additional capabilities (adding Advanced Graphs, Monthly Analysis
and Partnership (or LLC) Models) are available at additional cost.
- alternative #1 Whale Pointö¾^
- alternative #2 Waterfall
Center
- alternative #3 1000 Ocean
Blvd.
- alternative #4 Beach
Overlook
- Difference Sensitivity
Analysis
Real Estate Investment Analysis
Whale Point
|
|
Start |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
End |
Total |
|
Before Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and Sale |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Effective Income |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Operating Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Debt |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Debt Service |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Tax |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Taxable Income Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Revenue |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Taxable Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Interest Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Depreciation |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Ordinary Income |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
After Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Before Tax |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Ordinary Income |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Capital Gains |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Taxable Income |
(65,160) |
0 |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(781,920) |
(899,208) |
(899,208) |
(899,208) |
(899,208) |
65,160 |
(7,506,432) |
|
Taxes |
22,154 |
0 |
265,853 |
265,853 |
265,853 |
265,853 |
265,853 |
305,731 |
305,731 |
305,731 |
305,731 |
(22,154) |
2,552,187 |
|
Cash Flow After Tax |
(43,006) |
0 |
(516,067) |
(516,067) |
(516,067) |
(516,067) |
(516,067) |
(593,477) |
(593,477) |
(593,477) |
(593,477) |
43,006 |
(4,954,245) |
|
Rate of Return Before Debt (IRR) |
0.0% |
|
Rate of Return Before Tax (IRR) |
0.0% |
|
Rate of Return After Tax (IRR) |
0.0% |
|
Net Present Value Before Debt @10% |
(4,555,376) |
|
Net Present Value Before Tax @10% |
(4,555,376) |
|
Net Present Value After Tax @10% |
(3,006,548) |
|
|
|
|
Real Estate Investment Analysis
Waterfall Center
|
|
Start |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
End |
Total |
|
Before Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and Sale |
0 |
(898,520) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
(898,520) |
|
Effective Income |
(202,167) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
202,167 |
(8,985,200) |
|
Operating Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Debt |
(202,167) |
(1,707,188) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
202,167 |
(9,883,720) |
|
Debt Service |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Tax |
(202,167) |
(1,707,188) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
202,167 |
(9,883,720) |
|
Taxable Income Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Revenue |
(202,167) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
202,167 |
(8,985,200) |
|
Taxable Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Interest Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Depreciation |
0 |
(20,159) |
(23,039) |
(23,039) |
(23,039) |
(23,039) |
(23,039) |
(23,039) |
(23,039) |
(23,039) |
(22,079) |
0 |
(226,550) |
|
Ordinary Income |
(202,167) |
(828,827) |
(831,707) |
(831,707) |
(831,707) |
(831,707) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,010,451) |
202,167 |
(9,211,750) |
|
After Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Before Tax |
(202,167) |
(1,707,188) |
(808,668) |
(808,668) |
(808,668) |
(808,668) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
(988,372) |
202,167 |
(9,883,720) |
|
Ordinary Income |
(202,167) |
(828,827) |
(831,707) |
(831,707) |
(831,707) |
(831,707) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,010,451) |
202,167 |
(9,211,750) |
|
Capital Gains |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
(671,970) |
(671,970) |
|
Taxable Income |
(202,167) |
(828,827) |
(831,707) |
(831,707) |
(831,707) |
(831,707) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,011,411) |
(1,010,451) |
(469,803) |
(9,883,720) |
|
Taxes |
68,737 |
281,801 |
282,780 |
282,780 |
282,780 |
282,780 |
343,880 |
343,880 |
343,880 |
343,880 |
343,553 |
159,733 |
3,360,465 |
|
Cash Flow After Tax |
(133,430) |
(1,425,387) |
(525,888) |
(525,888) |
(525,888) |
(525,888) |
(644,492) |
(644,492) |
(644,492) |
(644,492) |
(644,819) |
361,900 |
(6,523,255) |
|
Rate of Return Before Debt (IRR) |
0.0% |
|
Rate of Return Before Tax (IRR) |
0.0% |
|
Rate of Return After Tax (IRR) |
0.0% |
|
Net Present Value Before Debt @10% |
(6,669,298) |
|
Net Present Value Before Tax @10% |
(6,669,298) |
|
Net Present Value After Tax @10% |
(4,566,123) |
|
|
|
|
Real Estate Investment Analysis
1000 Ocean Blvd.
|
|
Start |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
End |
Total |
|
Before Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and Sale |
0 |
(1,181,500) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
(1,181,500) |
|
Effective Income |
0 |
(850,680) |
(876,200) |
(902,486) |
(929,561) |
(957,448) |
(986,171) |
(1,015,756) |
(1,046,229) |
(1,077,616) |
(1,109,944) |
0 |
(9,752,093) |
|
Operating Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Debt |
0 |
(2,032,180) |
(876,200) |
(902,486) |
(929,561) |
(957,448) |
(986,171) |
(1,015,756) |
(1,046,229) |
(1,077,616) |
(1,109,944) |
0 |
(10,933,593) |
|
Debt Service |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Cash Flow Before Tax |
0 |
(2,032,180) |
(876,200) |
(902,486) |
(929,561) |
(957,448) |
(986,171) |
(1,015,756) |
(1,046,229) |
(1,077,616) |
(1,109,944) |
0 |
(10,933,593) |
|
Taxable Income Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Revenue |
0 |
(850,680) |
(876,200) |
(902,486) |
(929,561) |
(957,448) |
(986,171) |
(1,015,756) |
(1,046,229) |
(1,077,616) |
(1,109,944) |
0 |
(9,752,093) |
|
Taxable Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Interest Expense |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Depreciation |
0 |
(26,508) |
(30,295) |
(30,295) |
(30,295) |
(30,295) |
(30,295) |
(30,295) |
(30,295) |
(30,295) |
(29,033) |
0 |
(297,900) |
|
Ordinary Income |
0 |
(877,188) |
(906,495) |
(932,781) |
(959,856) |
(987,743) |
(1,016,466) |
(1,046,051) |
(1,076,524) |
(1,107,911) |
(1,138,977) |
0 |
(10,049,992) |
|
After Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Before Tax |
0 |
(2,032,180) |
(876,200) |
(902,486) |
(929,561) |
(957,448) |
(986,171) |
(1,015,756) |
(1,046,229) |
(1,077,616) |
(1,109,944) |
0 |
(10,933,593) |
|
Ordinary Income |
0 |
(877,188) |
(906,495) |
(932,781) |
(959,856) |
(987,743) |
(1,016,466) |
(1,046,051) |
(1,076,524) |
(1,107,911) |
(1,138,977) |
0 |
(10,049,992) |
|
Capital Gains |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
(883,600) |
(883,600) |
|
Taxable Income |
0 |
(877,188) |
(906,495) |
(932,781) |
(959,856) |
(987,743) |
(1,016,466) |
(1,046,051) |
(1,076,524) |
(1,107,911) |
(1,138,977) |
(883,600) |
(10,933,593) |
|
Taxes |
0 |
298,244 |
308,208 |
317,146 |
326,351 |
335,833 |
345,598 |
355,657 |
366,018 |
376,690 |
387,252 |
300,424 |
3,717,422 |
|
Cash Flow After Tax |
0 |
(1,733,936) |
(567,992) |
(585,341) |
(603,210) |
(621,615) |
(640,573) |
(660,099) |
(680,211) |
(700,926) |
(722,692) |
300,424 |
(7,216,171) |
|
Rate of Return Before Debt (IRR) |
0.0% |
|
Rate of Return Before Tax (IRR) |
0.0% |
|
Rate of Return After Tax (IRR) |
0.0% |
|
Net Present Value Before Debt @10% |
(7,311,497) |
|
Net Present Value Before Tax @10% |
(7,311,497) |
|
Net Present Value After Tax @10% |
(5,041,746) |
|
|
|
|
Real Estate Investment Analysis
Beach Overlook
|
|
Buy |
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
Sell |
Total |
|
Before Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment and Sale |
(4,175,000) |
(1,252,500) |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
5,274,200 |
(153,300) |
|
Effective Income |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Operating Expense |
0 |
(250,500) |
(258,015) |
(265,755) |
(273,728) |
(281,940) |
(290,398) |
(299,110) |
(308,083) |
(317,326) |
(326,846) |
0 |
(2,871,702) |
|
Cash Flow Before Debt |
(4,175,000) |
(1,503,000) |
(258,015) |
(265,755) |
(273,728) |
(281,940) |
(290,398) |
(299,110) |
(308,083) |
(317,326) |
(326,846) |
5,274,200 |
(3,025,002) |
|
Debt Service |
2,922,500 |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(269,658) |
(2,589,409) |
(2,363,489) |
|
Cash Flow Before Tax |
(1,252,500) |
(1,772,658) |
(527,673) |
(535,413) |
(543,386) |
(551,598) |
(560,056) |
(568,768) |
(577,741) |
(586,984) |
(596,504) |
2,684,791 |
(5,388,491) |
|
Taxable Income Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Revenue |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
|
Taxable Expense |
0 |
(250,500) |
(258,015) |
(265,755) |
(273,728) |
(281,940) |
(290,398) |
(299,110) |
(308,083) |
(317,326) |
(326,846) |
0 |
(2,871,702) |
|
Interest Expense |
0 |
(247,565) |
(245,612) |
(243,487) |
(241,173) |
(238,656) |
(235,915) |
(232,933) |
(229,687) |
(226,153) |
(222,308) |
0 |
(2,363,489) |
|
Depreciation |
0 |
(105,044) |
(112,404) |
(112,404) |
(112,404) |
(112,404) |
(112,404) |
(112,404) |
(112,404) |
(112,404) |
(107,720) |
0 |
(1,111,995) |
|
Ordinary Income |
0 |
(603,109) |
(616,031) |
(621,646) |
(627,305) |
(632,999) |
(638,717) |
(644,447) |
(650,174) |
(655,883) |
(656,874) |
0 |
(6,347,186) |
|
After Tax Cash Flow Projection |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Before Tax |
(1,252,500) |
(1,772,658) |
(527,673) |
(535,413) |
(543,386) |
(551,598) |
(560,056) |
(568,768) |
(577,741) |
(586,984) |
(596,504) |
2,684,791 |
(5,388,491) |
|
Ordinary Income |
0 |
(603,109) |
(616,031) |
(621,646) |
(627,305) |
(632,999) |
(638,717) |
(644,447) |
(650,174) |
(655,883) |
(656,874) |
0 |
(6,347,186) |
|
Capital Gains |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
958,695 |
958,695 |
|
Taxable Income |
0 |
(603,109) |
(616,031) |
(621,646) |
(627,305) |
(632,999) |
(638,717) |
(644,447) |
(650,174) |
(655,883) |
(656,874) |
958,695 |
(5,388,491) |
|
Taxes |
0 |
205,057 |
209,451 |
211,360 |
213,284 |
215,220 |
217,164 |
219,112 |
221,059 |
223,000 |
223,337 |
(325,956) |
1,832,087 |
|
Cash Flow After Tax |
(1,252,500) |
(1,567,601) |
(318,222) |
(324,054) |
(330,102) |
(336,378) |
(342,892) |
(349,656) |
(356,682) |
(363,984) |
(373,167) |
2,358,835 |
(3,556,404) |
|
Rate of Return Before Debt (IRR) |
0.0% |
|
Rate of Return Before Tax (IRR) |
0.0% |
|
Rate of Return After Tax (IRR) |
0.0% |
|
Net Present Value Before Debt @10% |
(5,188,457) |
|
Net Present Value Before Tax @10% |
(5,002,744) |
|
Net Present Value After Tax @10% |
(3,747,180) |
|
|
|
|
Sensitivity Analysis Comparison
Present
Value Discount Rate After Tax
versus
Net Present Value After Tax @10%
|
Assumption |
cost_beach |
cost_ocean |
cost_waterfall |
cost_whale |
|
Zero |
(3,556,404) |
(7,216,171) |
(6,523,255) |
(4,954,245) |
|
2% per Year |
(3,651,042) |
(6,651,366) |
(6,016,387) |
(4,442,899) |
|
4% per Year |
(3,709,027) |
(6,162,718) |
(5,577,040) |
(4,003,291) |
|
6% per Year |
(3,739,896) |
(5,737,961) |
(5,194,492) |
(3,623,522) |
|
8% per Year |
(3,750,816) |
(5,367,055) |
(4,859,940) |
(3,293,913) |
|
10% per Year |
(3,747,180) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
12% per Year |
(3,733,049) |
(4,755,214) |
(4,307,024) |
(2,754,927) |
|
14% per Year |
(3,711,478) |
(4,501,799) |
(4,077,636) |
(2,533,683) |
|
16% per Year |
(3,684,769) |
(4,276,787) |
(3,873,776) |
(2,338,365) |
|
18% per Year |
(3,654,647) |
(4,076,228) |
(3,691,933) |
(2,165,268) |
|
20% per Year |
(3,622,406) |
(3,896,806) |
(3,529,150) |
(2,011,291) |
|
|
|
|
Sensitivity Analysis Comparison
Holding
Period
versus
Net Present Value After Tax @10%
|
Assumption |
cost_beach |
cost_ocean |
cost_waterfall |
cost_whale |
|
1 Year |
(1,358,579) |
(1,337,838) |
(1,131,359) |
(3,910) |
|
2 Years |
(1,708,917) |
(1,870,966) |
(1,629,276) |
(454,951) |
|
3 Years |
(2,034,905) |
(2,368,846) |
(2,081,582) |
(864,988) |
|
4 Years |
(2,337,130) |
(2,833,567) |
(2,492,233) |
(1,237,750) |
|
5 Years |
(2,617,492) |
(3,267,391) |
(2,865,067) |
(1,576,624) |
|
6 Years |
(2,877,725) |
(3,672,423) |
(3,273,807) |
(1,884,691) |
|
7 Years |
(3,119,418) |
(4,050,619) |
(3,644,988) |
(2,206,430) |
|
8 Years |
(3,344,023) |
(4,403,796) |
(3,982,059) |
(2,498,920) |
|
9 Years |
(3,552,871) |
(4,733,647) |
(4,288,155) |
(2,764,820) |
|
10 Years |
(3,747,180) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
|
|
|
Sensitivity Analysis Comparison
Holding
Period
versus
Net Present Value After Tax @10%
|
Assumption |
cost_beach |
cost_ocean |
cost_waterfall |
cost_whale |
|
1 Year |
(32.54) |
(28.31) |
(25.18) |
(0.10) |
|
2 Years |
(40.93) |
(39.59) |
(36.27) |
(11.64) |
|
3 Years |
(48.74) |
(50.12) |
(46.33) |
(22.12) |
|
4 Years |
(55.98) |
(59.96) |
(55.47) |
(31.66) |
|
5 Years |
(62.69) |
(69.14) |
(63.77) |
(40.33) |
|
6 Years |
(68.93) |
(77.71) |
(72.87) |
(48.21) |
|
7 Years |
(74.72) |
(85.71) |
(81.13) |
(56.44) |
|
8 Years |
(80.10) |
(93.18) |
(88.64) |
(63.92) |
|
9 Years |
(85.10) |
(100.16) |
(95.45) |
(70.72) |
|
10 Years |
(89.75) |
(106.68) |
(101.64) |
(76.90) |
|
|
|
|
Sensitivity Analysis Comparison
Property
Value Yearly Growth Rate (%>Inflation)
versus
Net Present Value After Tax @10%
|
Assumption |
cost_beach |
cost_ocean |
cost_waterfall |
cost_whale |
|
At the Inflation Rate |
(3,747,180) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
1% Over Inflation |
(3,611,040) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
2% Over Inflation |
(3,462,595) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
3% Over Inflation |
(3,300,865) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
4% Over Inflation |
(3,124,804) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
5% Over Inflation |
(2,933,294) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
6% Over Inflation |
(2,725,143) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
7% Over Inflation |
(2,499,076) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
8% Over Inflation |
(2,253,736) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
9% Over Inflation |
(1,987,675) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
10% Over Inflation |
(1,699,354) |
(5,041,746) |
(4,566,123) |
(3,006,548) |
|
|
|
|
Analysis Assumptions Report
Whale Point
|
Investment Assumptions |
||
|
Price of Property |
|
Tenant Representation |
|
Date of Acquisition |
|
1 January 2002 |
|
Holding Period |
|
10 Years |
|
Inflation Rate |
|
3% per Year |
|
Sale Price Method |
|
No Sale Price Specified |
|
Selling Costs |
|
6% |
|
|
|
|
|
Investor's Assumptions |
||
|
General Vacancy & Credit Loss |
|
Zero |
|
Tax Rate - First Year |
|
34% |
|
Tax Rate - Following Years |
|
34% |
|
Capital Gain Rate |
|
34% |
|
Cost Recovery Recapture Rate |
|
34% - Losses Taken Currently |
|
Present Value Discount Rate Before Debt |
|
10% per Year |
|
Present Value Discount Rate Before Tax |
|
10% per Year |
|
Present Value Discount Rate After Tax |
|
10% per Year |
|
|
|
|
|
Whale Point Revenue Assumptions |
||
|
Annual Revenue (39,096 SqFt @ ($20.00)/SqFt/Year) |
|
($781,920.00) |
|
Revenue Start Date |
|
1 January 2003 |
|
Revenue Period |
|
5 Years |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Whale Point Continued Revenue Assumptions |
||
|
Annual Revenue (39,096 SqFt @ ($23.00)/SqFt/Year) |
|
($899,208.00) |
|
Revenue Start Date |
|
Continuation |
|
Revenue Period |
|
5 Years |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Whale Point Security Revenue Assumptions |
||
|
Annual Revenue |
|
($65,160.00) |
|
Revenue Start Date |
|
at Acquisition |
|
Revenue Period |
|
Until Projected Sale |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Whale Point Return Revenue Assumptions |
||
|
Annual Revenue |
|
$65,160.00 |
|
Revenue Start Date |
|
at End of Lease |
|
Revenue Period |
|
Until Projected Sale |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
|
|
|
Analysis Assumptions Report
Waterfall Center
|
Investment Assumptions |
||
|
Price of Property |
|
Tenant Representation |
|
Date of Acquisition |
|
1 January 2002 |
|
Holding Period |
|
10 Years |
|
Inflation Rate |
|
3% per Year |
|
Sale Price Method |
|
No Sale Price Specified |
|
Selling Costs |
|
6% |
|
|
|
|
|
Investor's Assumptions |
||
|
General Vacancy & Credit Loss |
|
Zero |
|
Tax Rate - First Year |
|
34% |
|
Tax Rate - Following Years |
|
34% |
|
Capital Gain Rate |
|
34% |
|
Cost Recovery Recapture Rate |
|
34% - Losses Taken Currently |
|
Present Value Discount Rate Before Debt |
|
10% per Year |
|
Present Value Discount Rate Before Tax |
|
10% per Year |
|
Present Value Discount Rate After Tax |
|
10% per Year |
|
|
|
|
|
Work Letter Depreciation Assumptions |
||
|
Depreciable Amount (44,926 SqFt @ $20.00/SqFt) |
|
$898,520.00 |
|
Depreciable Life |
|
39 Years |
|
Depreciation Method |
|
Straight Line |
|
Depreciation Start Date |
|
1 February 2002 |
|
|
|
|
|
Waterfall Center Revenue Assumptions |
||
|
Notes Here |
||
|
Annual Revenue (44,926 SqFt @ ($18.00)/SqFt/Year) |
|
($808,668.00) |
|
Revenue Start Date |
|
at Acquisition |
|
Revenue Period |
|
5 Years |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Waterfall Center Bump Revenue Assumptions |
||
|
Annual Revenue (44,926 SqFt @ ($22.00)/SqFt/Year) |
|
($988,372.00) |
|
Revenue Start Date |
|
Continuation |
|
Revenue Period |
|
5 Years |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Waterfall Center Security Revenue Assumptions |
||
|
Annual Revenue |
|
($202,167.00) |
|
Revenue Start Date |
|
at Acquisition |
|
Revenue Period |
|
Until Projected Sale |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
|
Waterfall Center Security Return Revenue Assumptions |
||
|
Notes Here |
||
|
Annual Revenue |
|
$202,167.00 |
|
Revenue Start Date |
|
at End of Lease |
|
Revenue Period |
|
Until Projected Sale |
|
Revenue Growth Method |
|
No Growth is Projected |
|
|
|
|
Analysis Assumptions Report
1000 Ocean Blvd.
|
Investment Assumptions |
||
|
Price of Property |
|
Tenant Representation |
|
Date of Acquisition |
|
1 January 2002 |
|
Holding Period |
|
10 Years |
|
Inflation Rate |
|
3% per Year |
|
Sale Price Method |
|
No Sale Price Specified |
|
Selling Costs |
|
6% |
|
|
|
|
|
Investor's Assumptions |
||
|
General Vacancy & Credit Loss |
|
Zero |
|
Tax Rate - First Year |
|
34% |
|
Tax Rate - Following Years |
|
34% |
|
Capital Gain Rate |
|
34% |
|
Cost Recovery Recapture Rate |
|
34% - Losses Taken Currently |
|
Present Value Discount Rate Before Debt |
|
10% per Year |
|
Present Value Discount Rate Before Tax |
|
10% per Year |
|
Present Value Discount Rate After Tax |
|
10% per Year |
|
|
|
|
|
Work Letter Depreciation Assumptions |
||
|
Depreciable Amount (47,260 SqFt @ $25.00/SqFt) |
|
$1,181,500.00 |
|
Depreciable Life |
|
39 Years |
|
Depreciation Method |
|
Straight Line |
|
Depreciation Start Date |
|
1 February 2002 |
|
|
|
|
|
1000 Ocean Blvd. Revenue Assumptions |
||
|
Notes Here |
||
|
Annual Revenue (47,260 SqFt @ ($18.00)/SqFt/Year) |
|
($850,680.00) |
|
Revenue Start Date |
|
at Acquisition |
|
Revenue Period |
|
Until Projected Sale |
|
Revenue Growth Method |
|
Annual at the Inflation Rate |
|
|
|
|
|
|
|
|
Analysis Assumptions Report
Beach Overlook
|
Investment Assumptions |
||
|
Price of Property |
|
$4,175,000.00 |
|
Date of Acquisition |
|
1 January 2002 |
|
Holding Period |
|
10 Years |
|
Inflation Rate |
|
3% per Year |
|
Sale Price Method |
|
Continuous Growth at Inflation Rate |
|
Selling Costs |
|
6% |
|
|
|
|
|
Investor's Assumptions |
||
|
General Vacancy & Credit Loss |
|
Zero |
|
Tax Rate - First Year |
|
34% |
|
Tax Rate - Following Years |
|
34% |
|
Capital Gain Rate |
|
34% |
|
Cost Recovery Recapture Rate |
|
34% - Losses Taken Currently |
|
Present Value Discount Rate Before Debt |
|
10% per Year |
|
Present Value Discount Rate Before Tax |
|
10% per Year |
|
Present Value Discount Rate After Tax |
|
10% per Year |
|
|
|
|
|
Building Depreciation Assumptions |
||
|
Depreciable Amount |
|
75% of Property Price |
|
Depreciable Life |
|
39 Years |
|
Depreciation Method |
|
Straight Line |
|
Depreciation Start Date |
|
at Acquisition |
|
|
|
|
|
Work Letter Depreciation Assumptions |
||
|
Depreciable Amount (41,750 SqFt @ $30.00/SqFt) |
|
$1,252,500.00 |
|
Depreciable Life |
|
39 Years |
|
Depreciation Method |
|
Straight Line |
|
Depreciation Start Date |
|
1 February 2002 |
|
|
|
|
|
Loan Assumptions |
||
|
Loan Amount |
|
70% of Property Price |
|
Loan Interest Rate |
|
8.5% Annually |
|
Original Loan Period |
|
30 Years |
|
Loan Origination Date |
|
at Acquisition |
|
Loan Type |
|
Monthly Payments, Amortizing |
|
|
|
|
|
Utilities & Taxes Expense Assumptions |
||
|
Annual Expense (41,750 SqFt @ $6.00/SqFt/Year) |
|
$250,500.00 |
|
Expense Start Date |
|
at Acquisition |
|
Expense Period |
|
Until Projected Sale |
|
Expense Growth Method |
|
Annual at the Inflation Rate |
|
|
|
|
|
|
|
|
|
|
|
|