Input all yellow shaded areas
Begin In terminal year
Building space (in square feet) 528357
Vacancy rate = 95% 97%
Rent/square foot 28.07
Inflation rate for rents/expenses = 3.00% 3.00%
Inflation rate for real estate taxes = 4.00% 3.00%
Inflation rate for ground rent = 0.00% 3.00%
Unlevered beta = 0.62 0.50
Levered beta = 1.20 1.20
Riskfree rate = 5.40%
Risk premium = 4.00%
1 2 3 4
Building Space 528357 528357 528357 528357
Occupancy 95% 95.50% 96.00% 96.50%
Rent/Square foot $28.07 $28.91 $29.78 $30.67 $31.59
Rental Income $14,512,115 $15,026,149 $15,557,965 $16,108,166
Garage Income $800,000 $824,000 $848,720 $874,182 $900,407
Reimbursement revenue 10.00% $353,735 $364,347 $375,277 $386,536
Credit Loss 2.50% $362,803 $375,654 $388,949 $402,704
Total Revenues $15,327,047 $15,863,563 $16,418,475 $16,992,404
Expenses
Real Estate Taxes $5.24 $2,879,334 $2,994,508 $3,114,288 $3,238,860
Ground Rent $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000
Other expenses $6.50 $3,537,350 $3,643,471 $3,752,775 $3,865,358
Management fee $300,000 $309,000 $318,270 $327,818 $337,653
Total Expenses $8,225,684 $8,456,248 $8,694,881 $8,941,870
Operating income before depreciation $7,101,363 $7,407,314 $7,723,594 $8,050,534
Depreciation $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
Operating income $5,101,363 $5,407,314 $5,723,594 $6,050,534
Taxes 38% $1,938,518 $2,054,779 $2,174,966 $2,299,203
Operating income after taxes $3,162,845 $3,352,535 $3,548,628 $3,751,331
+ Depreciation $2,000,000 $2,000,000 $2,000,000 $2,000,000
- Capital maintenance & Leasehold Improvem $1,500,000 $1,545,000 $1,591,350 $1,639,091 $1,688,263
Cash flow to firm $3,617,845 $3,761,185 $3,909,538 $4,063,068
Terminal value
Present value $101,480,449 $3,397,275 $3,316,547 $3,237,186 $3,159,199
Cost of equity 10.19% 10.19% 10.19% 10.19% 10.19%
Cost of debt 6.50% 6.50% 6.50% 6.50% 6.50%
Debt ratio 60% 60.00% 60.00% 60.00% 60.00%
Cost of capital 6.49% 6.49% 6.49% 6.49% 6.49%
5 Terminal year
528357
97%
$32.54
$16,677,377 $17,177,698
$927,419 $955,242
$398,132 $410,076
$416,934 $429,442
$17,585,993 $18,113,573
$3,368,414 $3,469,466
$1,500,000 $1,545,000
$3,981,319 $4,100,758
$347,782 $358,216
$9,197,515 $9,473,440
$8,388,478 $8,640,133
$2,000,000 $2,060,000
$6,388,478 $6,580,133
$2,427,622 $2,500,450
$3,960,857 $4,079,682
$2,000,000 $2,060,000
$1,738,911 $2,060,000
$4,221,946 $4,079,682
$116,810,659
$88,370,242
10.19% 10.19%
6.50% 6.50%
60.00% 60.00%
6.49% 6.49%
Valuing equity stake in building
Debt= $60,888,269
1 2 3 4
Building Space 528357 528357 528357 528357
Occupancy 95.00% 95.50% 96.00% 96.50%
Rent/Square foot $28.07 $28.91 $29.78 $30.67 $31.59
Rental Income $14,512,115 $15,026,149 $15,557,965 $16,108,166
Garage Income $800,000 $824,000 $848,720 $874,182 $900,407
Reimbursement revenue $0.10 $353,735 $364,347 $375,277 $386,536
Credit Loss 2.50% $362,803 $375,654 $388,949 $402,704
Total Revenues $15,327,047 $15,863,563 $16,418,475 $16,992,404
Expenses
Real Estate Taxes 5.24 $2,879,334 $2,994,508 $3,114,288 $3,238,860
Ground Rent 1500000 $1,500,000 $1,500,000 $1,500,000 $1,500,000
Other expenses 6.5 $3,537,350 $3,643,471 $3,752,775 $3,865,358
Management fee 300000 $309,000 $318,270 $327,818 $337,653
Interest expenses $3,957,737 $3,957,737 $3,957,737 $3,957,737
Total Expenses 0 $12,183,422 $12,413,986 $12,652,618 $12,899,608
Net income before depreciation & taxes 0 $3,143,625 $3,449,577 $3,765,856 $4,092,797
Depreciation 2000000 $2,000,000 $2,000,000 $2,000,000 $2,000,000
Operating income 0 $1,143,625 $1,449,577 $1,765,856 $2,092,797
Taxes 0.38 $434,578 $550,839 $671,025 $795,263
Net income 0 $709,048 $898,738 $1,094,831 $1,297,534
+ Depreciation 0 $2,000,000 $2,000,000 $2,000,000 $2,000,000
- Capital maintenance & Leasehold Improvem 1500000 $1,545,000 $1,591,350 $1,639,091 $1,688,263
Cash flow to equity $1,164,048 $1,307,388 $1,455,741 $1,609,271
Terminal value
Present value $39,832,499 $1,056,435 $1,076,833 $1,088,178 $1,091,735
Cost of equity 10.19% 10.19% 10.19% 10.19% 10.19%
5
528357
97.00%
$32.54
$16,677,377
$927,419
$398,132
$416,934
$17,585,993
$3,368,414
$1,500,000
$3,981,319
$347,782
$3,957,737
$13,155,252
$4,430,741
$2,000,000
$2,430,741
$923,682
$1,507,059
$2,000,000
$1,738,911
$1,768,148
$55,922,390
$35,519,318
10.19%
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.67568711
R Square 0.45655306
Adjusted R S 0.36597858
Standard Erro 49.0937492
Observations 8
ANOVA
df SS MS F Significance F
Regression 1 12148.9227 12148.9227 5.04063637 0.06588019
Residual 6 14461.1773 2410.19621
Total 7 26610.0999
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -2535.50229 1223.70788 -2.07198329 0.08365755 -5529.8098 458.805222 -5529.8098 458.805222
X Variable 1 2857.85636 1272.91004 2.24513616 0.06588019 -256.844583 5972.5573 -256.844583 5972.5573
Property Size Occupancy ratePrice for sale Price/Square foot NOI/SFPrice/NOI
900 Third Avenue 560000 99% $182,000,000 $325.00 26.98 12.05
767 Third Avenue 456007 95% $95,000,000 $208.33 NA
350 Madison Avenue 310000 97% $70,060,000 $226.00 17.6 12.84
888 Seventh Avenue 838680 96% $154,500,000 $184.22 NA
622 Third Avenue 874434 97% $172,000,000 $196.70 NA
150 East 58th Street 507178 95% $118,000,000 $232.66 16.52 14.08
1065 Avenue of the America 580000 95% $59,000,000 $101.72 NA
810 Seventh Avenue 646000 95% $141,000,000 $218.27 15.17 14.39
Average 96.13% $211.61 13.34
711 Third Avenue 528357 95% 6107405 11.56
Estimated value
Price per square foot $111,806,755.01
Price per rented square foot $110,498,223.42
Price based upon NOI 81470375.68313
1.155847277504
