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Market rent is currently $50/sqft per year for 100,000 sqft. Market rent increases 2% annually. Vacancy...

Market rent is currently $50/sqft per year for 100,000 sqft. Market rent increases 2% annually. Vacancy is 7% of PGI each year. Operating expenses are $30/sqft per year and increasing by 3$ annually. Create the pro forma cash flow statement for the next five years showing PGI, EGI, and NOI.

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Year Today (0) 1 2 3 4 5
Market Rent $50.00 $51.00 $52.02 $53.06 $54.12 $55.20
growth rate 2%
Area $1,00,000 $1,00,000 $1,00,000 $1,00,000 $1,00,000 $1,00,000
Potential Gross Income (PGI)
(Area * market rent) $50,00,000 $51,00,000 $52,02,000 $53,06,040 $54,12,161 $55,20,404
Vacancy (%) 7% 7% 7% 7% 7% 7%
Vacancy $3,50,000 $3,57,000 $3,64,140 $3,71,423 $3,78,851 $3,86,428
(PGI * Vacancy %)
Effective Gross Income (EGI) $46,50,000 $47,43,000 $48,37,860 $49,34,617 $50,33,310 $51,33,976
(PGI - Vacancy)
Operating Expenses Rate $30 $33 $36 $39 $42 $45
growth $3
Operating Expenses (OPE) $30,00,000 $33,00,000 $36,00,000 $39,00,000 $42,00,000 $45,00,000
(Area * OE rate)
Net Operating Income (NOI) $16,50,000 $14,43,000 $12,37,860 $10,34,617 $8,33,310 $6,33,976
(EGI - OPE)

jeff jeffy answered 1 year ago
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