Annual Property Operating Data

Retail - Office


The APOD is a very useful snapshot of the status of a property investment as of the projected Acquisition Date, showing most of the information relevant to the investment, absent any projections of performance.


Purpose

For Sale

Name

Retail - Office

Location

USA

Property Type

Retail - Office

Date

18 April 2008

Square Feet

20,000

Price

$4,000,000

 -Loans

2,267,138

Down Payment

1,732,862

 +Acq Costs

20,000

 +Loan Points

22,671

Investment

1,775,534








 

$/SqFt

% of GI

Annual $

Gross Income

 

 

 

  201 Office (10,000 sf)

12.00

32.5%

120,000

  102 Drug Store (7,500 sf)

12.60

25.6%

94,500

  103 Beauty Salon (2,000 sf)

14.50

7.9%

29,000

  104 Donuts (2,000 sf)

14.50

7.9%

29,000

  105 Flowers (1,000 sf)

14.50

3.9%

14,500

  Base Rental Revenue

$14.35

77.7%

$287,000

  Percentage Rent

$0.20

1.1%

$4,000

  Total Reimbursements

$3.91

21.2%

$78,233

Total Gross Income

$18.46

100.0%

$369,233

  - Vacancy & Credit Loss

0.00

0.0%

0

Effective Income

$18.46

100.0%

$369,233

Less: Operating Expenses

 

 

 

  Maintenance

0.57

3.1%

11,400

  Insurance

0.23

1.2%

4,600

  Property Taxes

2.00

10.8%

40,000

  Security

0.15

0.8%

3,000

  Utilities

0.17

0.9%

3,400

  Management Fee

0.70

3.8%

14,000

Total Operating Expenses

$3.82

20.7%

$76,400

Net Operating Income

$14.64

79.3%

$292,833

 Less: Debt Service

 

 

 

  Loan

11.38

61.6%

227,559

Total Debt Service

$11.38

61.6%

$227,559

Net Operating Cash Flow

$3.26

17.7%

$65,274

 

Capitalization Rate

7.32%

Gross Income Multiplier

10.83

Cash on Cash

3.68%

Debt Coverage Ratio

1.287

Price/SqFt

$200

 

 

 

 

 


Use of Effective Income at Acquisition (

Retail - Office


 

 

 

 

 

 


Source of Gross Income at Acquisition ($

Retail - Office


 

 

 

 

 

 


Property Acquisition Report

Retail - Office


This report shows the projected cash requirement for acquisition of the Retail - Office on 1 January 2008.


Cost of Property Acquired

 

 

 

Price of Property

$4,000,000

 

 

  + Closing Costs (.5%)

20,000

 

 

Total Cost of Property Acquired

 

 

$4,020,000

 

 

 

 

Property Financing

 

 

 

Loan Loan Principal

$2,267,138

 

 

  - Points (1 Point)

22,671

 

 

Loan Loan Proceeds

 

$2,244,466

 

Total Net Loan Proceeds

 

 

2,244,466

Cash Required at Acquisition

 

 

$1,775,534

 

 

 

 

 


Source of Acquisition Funds

Retail - Office


 

 

 

 

 

 


Retail - Office

Acquisition Annual Gross Income Tenant Rent Roll


Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Office

201

10,000

1/08

1/10

12.00

3.58

15.58

155,789

 

Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Drug Store

102

7,500

1/07

1/13

13.13

3.40

16.53

123,967

 

Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Beauty Salon

103

2,000

1/08

4/08

14.50

3.40

17.90

35,791

 

Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Donuts

104

2,000

1/08

11/08

14.50

3.40

17.90

35,791

 

Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Flowers

105

1,000

1/08

7/13

14.50

3.40

17.90

17,896

 

Tenant Name

Suite

RSF

Start

End

Rent/RSF

Reimb/RSF

Total/RSF

Total $

Totals

 

22,500

 

 

12.93

3.48

16.41

369,233

 

 

 

 

 


Rentable Square Feet Distribution

Retail - Office


 

 

 

 

 

 


Proforma Income Statement

Retail - Office


This Statement is for the Retail - Office as acquired on 1 January 2008 for a Price of $4,000,000, subject to a Loan of $2,267,138, for a Down Payment of $1,732,862.


 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Gross Income

 

 

 

 

 

 

 

 

 

 

  201 Office

120,000

123,600

141,419

145,338

149,698

154,189

158,814

163,916

168,491

173,545

  102 Drug Store

94,500

94,500

99,225

99,225

99,225

119,902

122,701

126,382

130,173

134,078

  103 Beauty Salon

31,548

32,963

33,952

34,537

34,218

35,244

36,309

37,389

38,511

39,666

  104 Donuts

29,366

31,313

32,252

33,220

34,215

35,242

36,299

37,473

38,511

39,666

  105 Flowers

14,500

14,500

15,500

16,500

16,500

17,210

18,152

18,696

19,273

19,834

  Base Rental Revenue

$289,914

$296,876

$322,348

$328,820

$333,856

$361,786

$372,275

$383,856

$394,959

$406,791

  Percentage Rent

$4,000

$4,280

$4,566

$4,857

$5,154

$5,457

$5,766

$6,082

$6,403

$6,731

  Total Reimbursements

$78,233

$80,217

$47,812

$46,778

$48,936

$51,155

$53,438

$51,673

$53,266

$55,752

Total Gross Income

$372,147

$381,373

$374,725

$380,455

$387,945

$418,398

$431,479

$441,610

$454,628

$469,274

  Less: Vacancy & Credit Loss

22,677

0

14,890

6,897

0

52,992

3,761

17,870

1,980

4,111

Effective Income

$349,471

$381,373

$359,835

$373,558

$387,945

$365,407

$427,718

$423,740

$452,648

$465,163

  Less: Operating Expenses

 

 

 

 

 

 

 

 

 

 

  Maintenance

11,400

11,742

12,094

12,457

12,831

13,216

13,612

14,021

14,441

14,874

  Insurance

4,600

4,830

5,072

5,325

5,591

5,871

6,164

6,473

6,796

7,136

  Property Taxes

40,000

40,800

41,616

42,448

43,297

44,163

45,046

45,947

46,866

47,804

  Security

3,000

3,090

3,183

3,278

3,377

3,478

3,582

3,690

3,800

3,914

  Utilities

3,400

3,502

3,607

3,715

3,827

3,942

4,060

4,182

4,307

4,436

  Management Fee

14,000

14,420

14,853

15,298

15,757

16,230

16,717

17,218

17,735

18,267

Total Operating Expenses

$76,400

$78,384

$80,424

$82,522

$84,680

$86,899

$89,182

$91,530

$93,946

$96,432

Net Operating Income

$273,071

$302,989

$279,411

$291,035

$303,266

$278,508

$338,536

$332,210

$358,702

$368,732

  Less: Debt Service

 

 

 

 

 

 

 

 

 

 

  Loan

227,559

227,559

227,559

227,559

227,559

227,559

227,559

227,559

227,559

227,559

Total Debt Service

$227,559

$227,559

$227,559

$227,559

$227,559

$227,559

$227,559

$227,559

$227,559

$227,559

Net Operating Cash Flow

$45,512

$75,430

$51,852

$63,476

$75,707

$50,949

$110,977

$104,651

$131,143

$141,173

  Less: Capital Spending

 

 

 

 

 

 

 

 

 

 

  Market TI's

12,279

0

101,034

2,240

2,251

62,644

2,454

119,881

1,292

0

  Market Commissions

6,022

0

11,264

1,052

1,058

22,907

1,153

14,249

607

0

Total Capital Spending

$18,301

$0

$112,299

$3,292

$3,309

$85,551

$3,606

$134,130

$1,899

$0

Cash Flow Before Tax

$27,211

$75,430

($60,447)

$60,184

$72,398

($34,603)

$107,370

($29,479)

$129,244

$141,173

Taxable Income and Taxes

 

 

 

 

 

 

 

 

 

 

  (Losses Taken Currently)

 

 

 

 

 

 

 

 

 

 

Taxable Revenues

$349,471

$381,373

$359,835

$373,558

$387,945

$365,407

$427,718

$423,740

$452,648

$465,163

  Less: Deducted Expenses

76,400

78,384

80,424

82,522

84,680

86,899

89,182

91,530

93,946

96,432

  Less: Interest Expense

179,639

175,662

171,354

166,690

161,637

156,166

150,240

143,823

136,873

129,346

  Less: Amortized Points

1,134

1,134

1,134

1,134

1,134

1,134

1,134

1,134

1,134

1,134

  Less: Depreciation

69,157

74,621

79,115

83,442

82,353

86,999

91,423

95,829

100,028

83,538

Ordinary Income

$23,141

$51,573

$27,808

$39,771

$58,141

$34,210

$95,739

$91,425

$120,667

$154,714

Taxable Income

23,141

51,573

27,808

39,771

58,141

34,210

95,739

91,425

120,667

154,714

Taxes Due (- = Savings)

9,604

21,403

11,540

16,505

24,129

14,197

39,731

37,941

50,077

64,206

Cash Flow After Tax

$17,607

$54,027

($71,987)

$43,679

$48,269

($48,800)

$67,639

($67,420)

$79,167

$76,967

Sale Proceeds:

 

 

 

 

 

 

 

 

 

 

Sale Value

$3,653,530

$3,759,804

$3,637,943

$3,790,821

$3,481,345

$4,231,700

$4,152,626

$4,483,773

$4,609,147

$4,024,231

  Less: Sale Costs (7%)

255,747

263,186

254,656

265,357

243,694

296,219

290,684

313,864

322,640

281,696

  Less: Loan Repayment

2,132,531

2,082,661

2,111,116

2,050,247

1,984,325

1,912,932

1,835,614

1,751,878

1,661,192

1,562,979

Sale Proceeds Before Tax

1,265,252

1,413,957

1,272,171

1,475,217

1,253,326

2,022,549

2,026,329

2,418,031

2,625,315

2,179,556

  Less: Taxes due to Sale

(104,296)

(68,325)

(90,162)

(56,926)

(87,833)

33,548

36,598

104,685

157,497

46,959

Sale Proceeds After Tax

1,369,548

1,482,281

1,362,333

1,532,143

1,341,159

1,989,001

1,989,731

2,313,347

2,467,818

2,132,597

Ratio Analysis:

 

 

 

 

 

 

 

 

 

 

Profitability Ratios

 

 

 

 

 

 

 

 

 

 

  Capitalization Rate

6.83%

7.57%

6.99%

7.28%

7.58%

6.96%

8.46%

8.31%

8.97%

9.22%

  Adj. Capitalization Rate

6.83%

7.55%

6.95%

7.05%

7.34%

6.73%

8.02%

7.87%

8.23%

8.45%

  Cash on Cash Before Tax

2.56%

4.25%

2.92%

3.58%

4.26%

2.87%

6.25%

5.89%

7.39%

7.95%

  Adj. Cash on Cash Before Tax

2.56%

4.21%

2.89%

3.33%

3.96%

2.66%

5.55%

5.24%

6.14%

6.60%

  Cash on Cash After Tax

2.02%

3.04%

2.27%

2.65%

2.90%

2.07%

4.01%

3.76%

4.57%

4.33%

  Adj. Cash on Cash After Tax

2.02%

3.02%

2.25%

2.46%

2.70%

1.92%

3.57%

3.34%

3.80%

3.60%

Risk Ratios

 

 

 

 

 

 

 

 

 

 

  Debt Coverage Ratio

1.200

1.331

1.228

1.279

1.333

1.224

1.488

1.460

1.576

1.620

  Breakeven Occupancy

81.7%

80.2%

82.2%

81.5%

80.5%

75.2%

73.4%

72.3%

70.7%

69.0%

  Loan Balance/Property Value

58.4%

55.4%

58.0%

54.1%

57.0%

45.2%

44.2%

39.1%

36.0%

38.8%

Assumption Ratios

 

 

 

 

 

 

 

 

 

 

  NOI/Property Value

7.47%

8.06%

7.68%

7.68%

8.71%

6.58%

8.15%

7.41%

7.78%

9.16%

  Operating Expense Ratio

20.5%

20.6%

21.5%

21.7%

21.8%

20.8%

20.7%

20.7%

20.7%

20.5%

Analysis Measures:

 

 

 

 

 

 

 

 

 

 

  IRR Before Debt

 

0.2%

0.8%

3.5%

2.9%

6.2%

6.2%

6.9%

7.4%

6.5%

  IRR Before Tax

 

 

 

 

 

3.5%

3.8%

5.3%

6.3%

4.5%

  IRR After Tax

 

 

 

 

 

2.3%

2.4%

3.7%

4.4%

2.9%

  NPV Before Debt @10.00%

($697,680)

($643,376)

($843,666)

($771,189)

($973,498)

($649,628)

($708,871)

($650,600)

($619,244)

($845,040)

  NPV Before Tax @10.00%

($688,123)

($605,974)

($779,063)

($683,892)

($866,213)

($524,805)

($568,727)

($497,142)

($454,284)

($670,219)

  NPV After Tax @10.00%

($627,490)

($575,640)

($749,049)

($695,679)

($877,958)

($617,895)

($683,769)

($660,244)

($658,391)

($848,585)

 

 

 

 

 


Common Size Income Statement

Retail - Office


This Statement is for the Retail - Office as acquired on 1 January 2008 for a Price of $4,000,000, subject to a Loan of $2,267,138, for a Down Payment of $1,732,862.


 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Gross Income

 

 

 

 

 

 

 

 

 

 

  201 Office

32.2%

32.4%

37.7%

38.2%

38.6%

36.9%

36.8%

37.1%

37.1%

37.0%

  102 Drug Store

25.4%

24.8%

26.5%

26.1%

25.6%

28.7%

28.4%

28.6%

28.6%

28.6%

  103 Beauty Salon

8.5%

8.6%

9.1%

9.1%

8.8%

8.4%

8.4%

8.5%

8.5%

8.5%

  104 Donuts

7.9%

8.2%

8.6%

8.7%

8.8%

8.4%

8.4%

8.5%

8.5%

8.5%

  105 Flowers

3.9%

3.8%

4.1%

4.3%

4.3%

4.1%

4.2%

4.2%

4.2%

4.2%

  Base Rental Revenue

77.9%

77.8%

86.0%

86.4%

86.1%

86.5%

86.3%

86.9%

86.9%

86.7%

  Percentage Rent

1.1%

1.1%

1.2%

1.3%

1.3%

1.3%

1.3%

1.4%

1.4%

1.4%

  Total Reimbursements

21.0%

21.0%

12.8%

12.3%

12.6%

12.2%

12.4%

11.7%

11.7%

11.9%

Total Gross Income

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

  Less: Vacancy & Credit Loss

6.1%

0.0%

4.0%

1.8%

0.0%

12.7%

0.9%

4.0%

0.4%

0.9%

Effective Income

93.9%

100.0%

96.0%

98.2%

100.0%

87.3%

99.1%

96.0%

99.6%

99.1%

  Less: Operating Expenses

 

 

 

 

 

 

 

 

 

 

  Maintenance

3.1%

3.1%

3.2%

3.3%

3.3%

3.2%

3.2%

3.2%

3.2%

3.2%

  Insurance

1.2%

1.3%

1.4%

1.4%

1.4%

1.4%

1.4%

1.5%

1.5%

1.5%

  Property Taxes

10.7%

10.7%

11.1%

11.2%

11.2%

10.6%

10.4%

10.4%

10.3%

10.2%

  Security

0.8%

0.8%

0.8%

0.9%

0.9%

0.8%

0.8%

0.8%

0.8%

0.8%

  Utilities

0.9%

0.9%

1.0%

1.0%

1.0%

0.9%

0.9%

0.9%

0.9%

0.9%

  Management Fee

3.8%

3.8%

4.0%

4.0%

4.1%

3.9%

3.9%

3.9%

3.9%

3.9%

Total Operating Expenses

20.5%

20.6%

21.5%

21.7%

21.8%

20.8%

20.7%

20.7%

20.7%

20.5%

Net Operating Income

73.4%

79.4%

74.6%

76.5%

78.2%

66.6%

78.5%

75.2%

78.9%

78.6%

  Less: Debt Service

 

 

 

 

 

 

 

 

 

 

  Loan

61.1%

59.7%

60.7%

59.8%

58.7%

54.4%

52.7%

51.5%

50.1%

48.5%

Total Debt Service

61.1%

59.7%

60.7%

59.8%

58.7%

54.4%

52.7%

51.5%

50.1%

48.5%

Net Operating Cash Flow

12.2%

19.8%

13.8%

16.7%

19.5%

12.2%

25.7%

23.7%

28.8%

30.1%

  Less: Capital Spending

 

 

 

 

 

 

 

 

 

 

  Market TI's

3.3%

0.0%

27.0%

0.6%

0.6%

15.0%

0.6%

27.1%

0.3%

0.0%

  Market Commissions

1.6%

0.0%

3.0%

0.3%

0.3%

5.5%

0.3%

3.2%

0.1%

0.0%

Total Capital Spending

4.9%

0.0%

30.0%

0.9%

0.9%

20.4%

0.8%

30.4%

0.4%

0.0%

Cash Flow Before Tax

7.3%

19.8%

(16.1%)

15.8%

18.7%

(8.3%)

24.9%

(6.7%)

28.4%

30.1%

 

 

 

 

 


Square Footage Income Statement

Retail - Office


This Statement is for the Retail - Office as acquired on 1 January 2008 for a Price of $4,000,000, subject to a Loan of $2,267,138, for a Down Payment of $1,732,862.


 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Gross Income

 

 

 

 

 

 

 

 

 

 

  201 Office (10,000 sf)

12.00

12.36

14.14

14.53

14.97

15.42

15.88

16.39

16.85

17.35

  102 Drug Store (7,500 sf)

12.60

12.60

13.23

13.23

13.23

15.99

16.36

16.85

17.36

17.88

  103 Beauty Salon (2,000 sf)

15.77

16.48

16.98

17.27

17.11

17.62

18.15

18.69

19.26

19.83

  104 Donuts (2,000 sf)

14.68

15.66

16.13

16.61

17.11

17.62

18.15

18.74

19.26

19.83

  105 Flowers (1,000 sf)

14.50

14.50

15.50

16.50

16.50

17.21

18.15

18.70

19.27

19.83

  Base Rental Revenue

$14.50

$14.84

$16.12

$16.44

$16.69

$18.09

$18.61

$19.19

$19.75

$20.34

  Percentage Rent

$0.20

$0.21

$0.23

$0.24

$0.26

$0.27

$0.29

$0.30

$0.32

$0.34

  Total Reimbursements

$3.91

$4.01

$2.39

$2.34

$2.45

$2.56

$2.67

$2.58

$2.66

$2.79

Total Gross Income

$18.61

$19.07

$18.74

$19.02

$19.40

$20.92

$21.57

$22.08

$22.73

$23.46

  Less: Vacancy & Credit Loss

1.13

0.00

0.74

0.34

0.00

2.65

0.19

0.89

0.10

0.21

Effective Income

$17.47

$19.07

$17.99

$18.68

$19.40

$18.27

$21.39

$21.19

$22.63

$23.26

  Less: Operating Expenses

 

 

 

 

 

 

 

 

 

 

  Maintenance

0.57

0.59

0.60

0.62

0.64

0.66

0.68

0.70

0.72

0.74

  Insurance

0.23

0.24

0.25

0.27

0.28

0.29

0.31

0.32

0.34

0.36

  Property Taxes

2.00

2.04

2.08

2.12

2.16

2.21

2.25

2.30

2.34

2.39

  Security

0.15

0.15

0.16

0.16

0.17

0.17

0.18

0.18

0.19

0.20

  Utilities

0.17

0.18

0.18

0.19

0.19

0.20

0.20

0.21

0.22

0.22

  Management Fee

0.70

0.72

0.74

0.76

0.79

0.81

0.84

0.86

0.89

0.91

Total Operating Expenses

$3.82

$3.92

$4.02

$4.13

$4.23

$4.34

$4.46

$4.58

$4.70

$4.82

Net Operating Income

$13.65

$15.15

$13.97

$14.55

$15.16

$13.93

$16.93

$16.61

$17.94

$18.44

  Less: Debt Service

 

 

 

 

 

 

 

 

 

 

  Loan

11.38

11.38

11.38

11.38

11.38

11.38

11.38

11.38

11.38

11.38

Total Debt Service

$11.38

$11.38

$11.38

$11.38

$11.38

$11.38

$11.38

$11.38

$11.38

$11.38

Net Operating Cash Flow

$2.28

$3.77

$2.59

$3.17

$3.79

$2.55

$5.55

$5.23

$6.56

$7.06

  Less: Capital Spending

 

 

 

 

 

 

 

 

 

 

  Market TI's

0.61

0.00

5.05

0.11

0.11

3.13

0.12

5.99

0.06

0.00

  Market Commissions

0.30

0.00

0.56

0.05

0.05

1.15

0.06

0.71

0.03

0.00

Total Capital Spending

$0.92

$0.00

$5.61

$0.16

$0.17

$4.28

$0.18

$6.71

$0.09

$0.00

Cash Flow Before Tax

$1.36

$3.77

($3.02)

$3.01

$3.62

($1.73)

$5.37

($1.47)

$6.46

$7.06

 

 

 

 

 


Base Rental Revenue Detail

Retail - Office


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

201 Office

120.0

123.6

141.4

145.3

149.7

154.2

158.8

163.9

168.5

173.5

102 Drug Store

94.5

94.5

99.2

99.2

99.2

119.9

122.7

126.4

130.2

134.1

103 Beauty Salon

31.5

33.0

34.0

34.5

34.2

35.2

36.3

37.4

38.5

39.7

104 Donuts

29.4

31.3

32.3

33.2

34.2

35.2

36.3

37.5

38.5

39.7

105 Flowers

14.5

14.5

15.5

16.5

16.5

17.2

18.2

18.7

19.3

19.8

 

 

 

 

 


Vacancy & Credit Loss

Retail - Office


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

 

22.7

0.0

14.9

6.9

0.0

53.0

3.8

17.9

2.0

4.1

 

 

 

 

 


Base Rental Revenue

Retail - Office


This graph shows the percentage of Effective Income coming from base revenue vs reimbursements.


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Base Rental Revenue

289.9

296.9

322.3

328.8

333.9

361.8

372.3

383.9

395.0

406.8

Total Reimbursements

78.2

80.2

47.8

46.8

48.9

51.2

53.4

51.7

53.3

55.8

Vacancy & Credit Loss

22.7

0.0

14.9

6.9

0.0

53.0

3.8

17.9

2.0

4.1

 

 

 

 

 


Adj Capitalization Rate

Retail - Office


Adj Capitalization Rate is Net Operating Income divided by the Price of Property at Acquisition adjusted for additional investments and dispositions made since acquisition. Additional Investments includes any and all TI's and Commissions scheduled due to the use of Market Profiles.


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Net Operating Income

273.1

303.0

279.4

291.0

303.3

278.5

338.5

332.2

358.7

368.7

Total Capital Spending

18.3

0.0

112.3

3.3

3.3

85.6

3.6

134.1

1.9

0.0

 

 

 

 

 


Adj Cash on Cash After Tax

Retail - Office


Adj Cash on Cash After Tax is Net Operating Cash Flow less Taxes Due divided by Initial Equity adjusted both for additional investments and dispositions made since acquisition, and for additional loans and loan repayments since acquisition.


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Net Operating Cash Flow

45.5

75.4

51.9

63.5

75.7

50.9

111.0

104.7

131.1

141.2

Total Capital Spending

18.3

0.0

112.3

3.3

3.3

85.6

3.6

134.1

1.9

0.0

Taxes Due (- = Savings)

9.6

21.4

11.5

16.5

24.1

14.2

39.7

37.9

50.1

64.2

 

 

 

 

 


Debt Coverage Ratio

Retail - Office


Debt Coverage Ratio is the Net Operating Income divided by Debt Service, measuring the margin of safety for the lender in assuring that money will be available to service his loan. The debt coverage ratio takes the current year Net Operating Income and divides it by the current year Debt Service. If the Net Operating Income is greater than the Debt Service the Debt Coverage Ratio will be greater than 1.


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total Debt Service

227.6

227.6

227.6

227.6

227.6

227.6

227.6

227.6

227.6

227.6

Net Operating Income

273.1

303.0

279.4

291.0

303.3

278.5

338.5

332.2

358.7

368.7

 

 

 

 

 


IRR After Tax

Retail - Office


Internal Rate of Return (IRR)
The Internal Rate of Return (IRR) of an investment is defined as the Present Value Discount Rate that makes the Net Present Value of the Investment equal to zero.

You may think of the IRR as the annual Interest Rate or Yield (compounded annually) that the investment is paying you over the Holding Period. Naturally, the higher the yield, the better the investment.

Unlike the ratios (current year only) the IRR takes into account all the before tax cash flows up to the time of calculation. For this reason the IRR is sometimes called the time value of money, because it not only takes into account the value but also the time necessary to create the value. In addition to the Cash Flow After Tax and the Sales Proceeds After Tax the initial equity is included in this measure.


 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Cash Flow After Tax

17.6

54.0

-72.0

43.7

48.3

-48.8

67.6

-67.4

79.2

77.0

Sale Proceeds After Tax

1,369.5

1,482.3

1,362.3

1,532.1

1,341.2

1,989.0

1,989.7

2,313.3

2,467.8

2,132.6

 

 

 

 

 


2013 Proforma Annual Statement

Retail - Office


This Statement is for the Retail - Office as acquired on 1 January 2008 for a Price of $4,000,000, subject to a Loan of $2,267,138, for a Down Payment of $1,732,862.


Sale Value

$4,231,700

  Less: Sale Costs (7%)

296,219

  Less: Loan Repayment

1,912,932

Sale Proceeds Before Tax

2,022,549

  Less: Taxes due to Sale

33,548

Sale Proceeds After Tax

1,989,001

Price

$4,000,000

 -Loans

2,267,138

Down Payment

1,732,862

 +Acq Costs

20,000

 +Loan Points

22,671

Investment

1,775,534








 

$/SqFt

% of GI

Annual $

Gross Income

 

 

 

  201 Office (10,000 sf)

15.42

36.9%

154,189

  102 Drug Store (7,500 sf)

15.99

28.7%

119,902

  103 Beauty Salon (2,000 sf)

17.62

8.4%

35,244

  104 Donuts (2,000 sf)

17.62

8.4%

35,242

  105 Flowers (1,000 sf)

17.21

4.1%

17,210

  Base Rental Revenue

$18.09

86.5%

$361,786

  Percentage Rent

$0.27

1.3%

$5,457

  Total Reimbursements

$2.56

12.2%

$51,155

Total Gross Income

$20.92

100.0%

$418,398

  Less: Vacancy & Credit Loss

2.65

12.7%

52,992

Effective Income

$18.27

87.3%

$365,407

  Less: Operating Expenses

 

 

 

  Maintenance

0.66

3.2%

13,216

  Insurance

0.29

1.4%

5,871

  Property Taxes

2.21

10.6%

44,163

  Security

0.17

0.8%

3,478

  Utilities

0.20

0.9%

3,942

  Management Fee

0.81

3.9%

16,230

Total Operating Expenses

$4.34

20.8%

$86,899

Net Operating Income

$13.93

66.6%

$278,508

  Less: Debt Service

 

 

 

  Loan

11.38

54.4%

227,559

Total Debt Service

$11.38

54.4%

$227,559

Net Operating Cash Flow

$2.55

12.2%

$50,949

  Less: Capital Spending

 

 

 

  Market TI's

3.13

15.0%

62,644

  Market Commissions

1.15

5.5%

22,907

Total Capital Spending

$4.28

20.4%

$85,551

Cash Flow Before Tax

($1.73)

(8.3%)

($34,603)

Taxable Income and Taxes

 

 

 

  (Losses Taken Currently)

 

 

 

Taxable Revenues

$18.27

87.3%

$365,407

  Less: Deducted Expenses

4.34

20.8%

86,899

  Less: Interest Expense

7.81

37.3%

156,166

  Less: Amortized Points

0.06

0.3%

1,134

  Less: Depreciation

4.35

20.8%

86,999

Ordinary Income

$1.71

8.2%

$34,210

Taxable Income

1.71

8.2%

34,210

Taxes Due (- = Savings)

0.71

3.4%

14,197

Cash Flow After Tax

($2.44)

(11.7%)

($48,800)

 

Capitalization Rate

6.96%

Adj. Capitalization Rate

6.73%

Cash on Cash Before Tax

2.87%

Adj. Cash on Cash Before Tax

2.66%

Cash on Cash After Tax

2.07%

Adj. Cash on Cash After Tax

1.92%

Debt Coverage Ratio

1.224

Breakeven Occupancy

75.2%

Loan Balance/Property Value

45.2%

NOI/Property Value

6.58%

Operating Expense Ratio

20.8%

IRR Before Debt

6.2%

IRR Before Tax

3.5%

IRR After Tax

2.3%

NPV Before Debt @10.00%

($649,628)

NPV Before Tax @10.00%

($524,805)

NPV After Tax @10.00%

($617,895)

 

 

 

 

 


2013 Use of Gross Income

Retail - Office


 

 

 

 

 

 


Property Sale Report

Retail - Office


This report shows the results of a projected sale of the Retail - Office on 31 December 2017. The Sale Price of $4,024,231 is projected by using a Net Capitalization Rate of 8% on the Net Operating Income of $321,938 projected to be received during the next 12 months, according to the analysis assumptions.


Analysis of Sale Proceeds

 

 

 

Sale Price (as discussed above)

$4,024,231

 

 

  - Costs of Sale (7%)

281,696

 

 

  - Loan Balances

1,562,979

 

 

  - Prepayment Penalties

0

 

 

Sale Proceeds Before Tax

 

 

$2,179,556

 

 

 

 

Analysis of Capital Gain Results

 

 

 

Sale Price

$4,024,231

 

 

  - Capitalized Costs of Sale (100%)

281,696

 

 

Net Sale Price for Tax Purposes

 

$3,742,535

 

 

 

 

 

Property Basis at Acquisition

$4,000,000

 

 

  + Capitalized Closing Costs (100%)

20,000

 

 

  + Capital Additions

362,387

 

 

  - Depreciation Taken

846,505

 

 

  + Excess Depreciation Recaptured

0

 

 

Adjusted Basis at Sale

 

3,535,882

 

Capital Gain (or Loss)

 

$206,652

 

  - Suspended Passive Losses

 

0

 

Net Capital Gain (or Loss)

 

$206,652

 

  - Cost Recovery Recaptured

 

206,652

 

Adjusted Net Capital Gain (or Loss)

 

$0

 

Cost Recovery Recapture Tax (@ 25%)

 

 

(51,663)

Tax on Adjusted Net Capital Gain (@ 15%)

 

 

0

 

 

 

 

Expenses Recognized at Sale

 

 

 

Expensed Costs of Sale

0

 

 

  + Accrued Loan Interest

0

 

 

  + Unamortized Points

11,336

 

 

  + Prepayment Penalties

0

 

 

  - Excess Depreciation Recaptured

0

 

 

Total Expenses Recognized at Sale

 

11,336

 

Tax Savings Due to Sale Expenses (@ 41.5%)

 

 

4,704

Net Taxable Income

 

$195,317

 

After Tax Cash Proceeds of Sale

 

 

$2,132,597

 

 

 

 

 


Sale Proceeds After Tax

Retail - Office


 

 

 

 

 

 


Lease Analysis Summary

Retail - Office


Name

Suite

RSF

Total $

PV @ 10%

PV/RSF

Office

201

10,000

1,316,498

836,167

83.62

Drug Store

102

7,500

1,325,009

829,618

110.62

Beauty Salon

103

2,000

377,810

229,793

114.90

Donuts

104

2,000

403,673

252,855

126.43

Flowers

105

1,000

201,480

127,250

127.25

 

 

 

 

 


Rentable Square Feet Comparison

Retail - Office


 

 

Office

Drug Store

Beauty Salon

Donuts

Flowers

 

10,000.0

7,500.0

2,000.0

2,000.0

1,000.0

 

 

 

 

 


PV/Year/RSF Comparison

Retail - Office


 

 

Office

Drug Store

Beauty Salon

Donuts

Flowers

 

8.4

11.1

11.5

12.6

12.7

 

 

 

 

 


Lease Analysis

Office


 

 

Measure

Rent

Rentable

Usable

Report Date

18 Apr 08

  Total Effective

1,316,498

131.65

 

Suite

201

  Avg Annual Effective

131,650

13.16

 

Rentable SF

10,000

  PV @ 10%

836,167

83.62

 

Usable SF

 

  Annual PV @ 10%

83,617

8.36

 

 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total

Base Rent

120,000

123,600

0

0

0

0

0

0

0

0

243,600

To Market

0

0

129,660

145,338

149,698

154,189

158,814

150,251

168,491

173,545

1,229,985

Market TI's

0

0

(101,034)

0

0

0

0

(117,415)

0

0

(218,449)

Market Commissions

0

0

(11,264)

0

0

0

0

(13,091)

0

0

(24,355)

Reimb Maintenance

3,567

3,719

0

161

327

498

675

71

187

379

9,585

Reimb Insurance

2,711

2,813

0

113

231

355

486

52

144

295

7,200

Reimb Property Taxes

18,444

18,800

0

370

747

1,132

1,525

160

408

825

42,412

Reimb Security

2,000

2,040

0

42

86

131

178

19

49

100

4,645

Reimb Utilities

2,178

2,223

0

48

98

149

201

21

56

113

5,087

Reimb Management Fee

6,889

7,076

0

198

402

612

829

88

230

466

16,788

Total $

155,789

160,271

17,362

146,270

151,589

157,066

162,707

20,156

169,564

175,724

1,316,498

Total PV

148,595

138,972

10,088

104,809

98,746

93,012

87,593

7,848

75,435

71,069

836,167

$/RSF

15.58

16.03

1.74

14.63

15.16

15.71

16.27

2.02

16.96

17.57

131.65

PV/RSF

14.86

13.90

1.01

10.48

9.87

9.30

8.76

0.78

7.54

7.11

83.62

 

 

 

 

 


Lease Analysis

Drug Store


 

 

Measure

Rent

Rentable

Usable

Report Date

18 Apr 08

  Total Effective

1,325,009

176.67

 

Suite

102

  Avg Annual Effective

132,501

17.67

 

Rentable SF

7,500

  PV @ 10%

829,618

110.62

 

Usable SF

 

  Annual PV @ 10%

82,962

11.06

 

 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total

Base Rent

94,500

94,500

0

0

0

0

0

0

0

0

189,000

Continued

0

0

99,225

99,225

99,225

0

0

0

0

0

297,675

To Market

0

0

0

0

0

80,197

122,701

126,382

130,173

134,078

593,531

Market TI's

0

0

0

0

0

(61,465)

0

0

0

0

(61,465)

Market Commissions

0

0

0

0

0

(22,353)

0

0

0

0

(22,353)

Percentage Rent

4,000

4,280

4,566

4,857

5,154

3,638

5,766

6,082

6,403

6,731

51,477

Reimb Maintenance

3,800

3,914

4,031

4,152

4,277

2,937

4,537

4,674

4,814

4,958

42,094

Reimb Insurance

1,533

1,610

1,691

1,775

1,864

1,305

2,055

2,158

2,265

2,379

18,634

Reimb Property Taxes

13,333

13,600

13,872

14,149

14,432

9,814

15,015

15,316

15,622

15,935

141,089

Reimb Security

1,000

1,030

1,061

1,093

1,126

773

1,194

1,230

1,267

1,305

11,077

Reimb Utilities

1,133

1,167

1,202

1,238

1,276

876

1,353

1,394

1,436

1,479

12,554

Reimb Management Fee

4,667

4,807

4,951

5,099

5,252

3,607

5,572

5,739

5,912

6,089

51,695

Total $

123,967

124,908

130,599

131,589

132,606

19,328

158,194

162,973

167,892

172,954

1,325,009

Total PV

118,242

108,309

102,949

94,299

86,389

9,895

85,152

79,750

74,688

69,945

829,618

$/RSF

16.53

16.65

17.41

17.55

17.68

2.58

21.09

21.73

22.39

23.06

176.67

PV/RSF

15.77

14.44

13.73

12.57

11.52

1.32

11.35

10.63

9.96

9.33

110.62

 

 

 

 

 


Lease Analysis

Beauty Salon


 

 

Measure

Rent

Rentable

Usable

Report Date

18 Apr 08

  Total Effective

377,810

188.91

 

Suite

103

  Avg Annual Effective

37,781

18.89

 

Rentable SF

2,000

  PV @ 10%

229,793

114.90

 

Usable SF

 

  Annual PV @ 10%

22,979

11.49

 

 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total

Base Rent

7,250

0

0

0

0

0

0

0

0

0

7,250

To Market

8,179

32,963

33,952

31,707

34,218

35,244

33,209

37,389

38,511

36,270

321,642

Market TI's

(10,224)

0

0

(2,240)

0

0

(2,454)

0

0

0

(14,918)

Market Commissions

(5,056)

0

0

(1,052)

0

0

(1,153)

0

0

0

(7,261)

Reimb Maintenance

507

1,044

1,075

1,015

1,141

1,175

1,109

1,246

1,284

1,212

10,807

Reimb Insurance

204

429

451

434

497

522

502

575

604

581

4,801

Reimb Property Taxes

1,778

3,627

3,699

3,459

3,849

3,926

3,670

4,084

4,166

3,895

36,152

Reimb Security

133

275

283

267

300

309

292

328

338

319

2,844

Reimb Utilities

151

311

321

303

340

350

331

372

383

361

3,223

Reimb Management Fee

622

1,282

1,320

1,247

1,401

1,443

1,362

1,531

1,576

1,488

13,271

Total $

3,544

39,930

41,100

35,139

41,745

42,968

36,869

45,525

46,862

44,128

377,810

Total PV

3,759

34,616

32,392

25,338

27,191

25,444

20,002

22,281

20,850

17,920

229,793

$/RSF

1.77

19.97

20.55

17.57

20.87

21.48

18.43

22.76

23.43

22.06

188.91

PV/RSF

1.88

17.31

16.20

12.67

13.60

12.72

10.00

11.14

10.43

8.96

114.90

 

 

 

 

 


Lease Analysis

Donuts


 

 

Measure

Rent

Rentable

Usable

Report Date

18 Apr 08

  Total Effective

403,673

201.84

 

Suite

104

  Avg Annual Effective

40,367

20.18

 

Rentable SF

2,000

  PV @ 10%

252,855

126.43

 

Usable SF

 

  Annual PV @ 10%

25,286

12.64

 

 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total

Base Rent

24,167

0

0

0

0

0

0

0

0

0

24,167

To Market

2,603

31,313

32,252

30,376

34,215

35,242

36,299

34,357

38,511

39,666

314,835

Market TI's

(2,055)

0

0

0

(2,251)

0

0

(2,466)

0

0

(6,772)

Market Commissions

(965)

0

0

0

(1,058)

0

0

(1,158)

0

0

(3,181)

Reimb Maintenance

929

1,044

1,075

1,015

1,141

1,175

1,210

1,142

1,284

1,322

11,336

Reimb Insurance

375

429

451

434

497

522

548

527

604

634

5,021

Reimb Property Taxes

3,259

3,627

3,699

3,459

3,849

3,926

4,004

3,744

4,166

4,249

37,981

Reimb Security

244

275

283

267

300

309

318

301

338

348

2,983

Reimb Utilities

277

311

321

303

340

350

361

341

383

394

3,381

Reimb Management Fee

1,141

1,282

1,320

1,247

1,401

1,443

1,486

1,403

1,576

1,624

13,922

Total $

29,974

38,281

39,401

37,100

38,434

42,966

44,226

38,191

46,862

48,238

403,673

Total PV

28,808

33,191

31,057

26,691

24,943

25,447

23,812

18,547

20,850

19,511

252,855

$/RSF

14.99

19.14

19.70

18.55

19.22

21.48

22.11

19.10

23.43

24.12

201.84

PV/RSF

14.40

16.60

15.53

13.35

12.47

12.72

11.91

9.27

10.43

9.76

126.43

 

 

 

 

 


Lease Analysis

Flowers


 

 

Measure

Rent

Rentable

Usable

Report Date

18 Apr 08

  Total Effective

201,480

201.48

 

Suite

105

  Avg Annual Effective

20,148

20.15

 

Rentable SF

1,000

  PV @ 10%

127,250

127.25

 

Usable SF

 

  Annual PV @ 10%

12,725

12.73

 

 

 

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Total

Base Rent

14,500

14,500

7,250

0

0

0

0

0

0

0

36,250

Continued

0

0

8,250

16,500

16,500

8,250

0

0

0

0

49,500

To Market

0

0

0

0

0

7,470

18,152

18,696

17,641

19,834

81,792

Market TI's

0

0

0

0

0

(1,179)

0

0

(1,292)

0

(2,471)

Market Commissions

0

0

0

0

0

(554)

0

0

(607)

0

(1,161)

Reimb Maintenance

507

522

538

554

570

538

605

623

588

661

5,706

Reimb Insurance

204

215

225

237

249

239

274

288

277

317

2,525

Reimb Property Taxes

1,778

1,813

1,850

1,887

1,924

1,799

2,002

2,042

1,909

2,125

19,129

Reimb Security

133

137

141

146

150

142

159

164

155

174

1,502

Reimb Utilities

151

156

160

165

170

161

180

186

175

197

1,702

Reimb Management Fee

622

641

660

680

700

661

743

765

723

812

7,007

Total $

17,896

17,984

19,074

20,168

20,264

17,527

22,115

22,764

19,569

24,120

201,480

Total PV

17,069

15,594

15,017

14,453

13,201

10,387

11,904

11,139

8,732

9,754

127,250

$/RSF

17.90

17.98

19.07

20.17

20.26

17.53

22.12

22.76

19.57

24.12

201.48

PV/RSF

17.07

15.59

15.02

14.45

13.20

10.39

11.90

11.14

8.73

9.75

127.25

 

 

 

 

 


Reimbursements Assumptions

Retail - Office


Suite

Tenant Name

SqFt

201

Office

10,000

 

Expense

Method

Amount

Prorata

Min

Max

GU%

Maintenance

$ Stop

$0.15/sf/yr

None

None

None

None

Insurance

$ Stop

$0.15/sf/yr

None

None

None

None

Property Taxes

$ Stop

$0.15/sf/yr

None

None

None

None