You have two properties to refinance. Property A is an office building that generates $325,000 in...

You have two properties to refinance. Property A is an office building that generates $325,000 in NOI and is worth $5,000,000. Property B is a warehouse that generates $425,000 in NOI and is worth $7,000,000. You are approaching a lender to see what can be offered on both. On the Office building, the loan amount will be the lesser of a LTV of 75% or a 1.30X DSCR, 4.00% fixed, and 25-year schedule. On the Warehouse building, the loan amount will be the lesser of a LTV of 75% or a 1.30X DSCR, 4.00% fixed, and 30-year schedule. What are the loan amounts for each property?

Expert Solution

LTV of Property A= $5000, 000*75% = 3750,000

DSCR of Property A = Net operating Income/ Total debt service

1.3 = 325000/Total debt service

Total Debt service = 250,000

LTV of Property B = $ 7000,000* 75% = $5250, 000

DSCR of Property B = 425000/Total debt service

1.3 = 425000/ Total debt service

Total debt service = 326,093

ekkarill92 answered 2 years ago

You want to purchase an office building in Brooklyn. The property contains 32,100 square feet of...

You want to purchase an office building in Brooklyn. The property contains 32,100 square feet of rentable space and is currently occupied by multiple tenants each with differing maturities on their respective leases. No lease is currently shorter than 1 year. The annual rent in the 1st year of ownership is $37.50/sq ft. The vacancy rate is 5.5%. You expect to incur collection losses (from tenant default) on 1.5% of the square feet during your first year. 1. What is...

4.You have two office-block proposals. You initially intended to invest $300,000 in the building and then...

4.You have two office-block proposals. You initially intended to invest $300,000 in the building and then sell it at the end of the year for $400,000. Under the revised proposal, you planned to rent out the offices for 3 years at a fixed annual rent of $15,000 and then sell the building for $500,000. a). Calculate the IRR for the initial proposal; b). Calculate the IRR for the revised proposal; c). Which proposal should be chosen based on the IRRs...

Jane Freeman transferred three properties to Health Innovations Corporation: An office building, office equipment in that...

Jane Freeman transferred three properties to Health Innovations Corporation: An office building, office equipment in that building, and an adjacent parking garage, in a Sec. 351 exchange, as shown in the table below: Property Adjusted Basis FMV Office building $80,000 $110,000 Office equipment 2,000 1,500 Parking Garage 15,000 12,000 $ 97,000 $123,500 The garage and equipment are free of liabilities, but a $110,000 mortgage remains on the office building. Complete calculations and explain your answers to...

The property you are appraising is a five-story office building. Each floor has 10,000 square feet...

The property you are appraising is a five-story office building. Each floor has 10,000 square feet of rentable space and is suitable for single occupancy. Two tenants have leases. Floor 3 is occupied under a five-year lease with three years remaining. The current rental is $128,600 per year. Floor 4 is occupied under a new five-year lease and the rent is $150,000 per year. Floors 1, 2, and 5 are vacant. The rent being paid for the fourth floor is...

You purchased a rental property that generates $50,000 during the first year. The property will produce...

You purchased a rental property that generates $50,000 during the first year. The property will produce an additional 49 cash flows growing at a rate of 4 percent per year. If the interest rate is 8 percent compounded yearly and rental payments are made at the beginning of each year, what should the value of this property be?

The ZMH Company has two divisions, Corporate Office Systems and Home Office Systems. You are building...

The ZMH Company has two divisions, Corporate Office Systems and Home Office Systems. You are building the budget for Home Office Systems. The forecast included 2019 year's sales of $35,000,000. There was a common sales team for both devisions. 35% of the sales team would be dedicated to Home Office Systems. Sales reps for Home Office would earn a 20% commission on sales of Home Office Systems. Home Office Systems would be charged for 35% of the fixed direct costs...

You have an opportunity to buy an office building for $125,000 that produces an annual NOI...

You have an opportunity to buy an office building for $125,000 that produces an annual NOI of $10,000. You can obtain an 80% loan from a bank with a 7% interest rate and amortized for 30 years. Your required investor cash on cash return is 12%. You will have to put 20% of the purchase down. What is the value of the office building? A. $140,999 B. $118,242 C. $113,895 D. $125,000

Rick, a wealthy investment banker, purchased an office building and underlying land (the property) for $10...

Rick, a wealthy investment banker, purchased an office building and underlying land (the property) for $10 million, borrowing the entire purchase price from the First Texas Savings and Loan. The loan is nonrecourse, secured by the property, and constitutes “qualified nonrecourse financing” under §465(b)(6). Principal and interest on the note are payable over 20 years. Rick did not invest any of his own money and did not devote any of his time to managing the office building (he hired a...

You are the owner of a 65,000 square foot office building. You purchased the building five...

You are the owner of a 65,000 square foot office building. You purchased the building five years ago for $11,500,000. During that entire time the building was triple net leased to a tenant who was also responsible for all maitenance and capital upkeep. The net rent the tenant paid was flat at $12.50 per square foot per year. You have just negotiated a lease extension which will raise the rent to $14.00 per square foot for the next 10 years....

As you may have learned when studying the properties of thermal energy, building contractors often install...

As you may have learned when studying the properties of thermal energy, building contractors often install double-glazed windows to prevent thermal energy (\"heat\") from entering/exiting the building. Although effective as insulators, such windows present interesting optical effects. In the figure, a double-glazed window comprises two identical panes of glass (ng = 1.44) separated by an air gap. If the light encounters the glass at an angle of 40.00

Question