Recreational Properties

There are a variety of views on, the property development process. In its simplest form, property development is the process of improving the value of land or building through the development of facilities that meet social, commercial and infrastructural requirements. It is about researching and conducting due diligence into the housing market and develop the right property to meet the demands of this market.

Using the tables (shown below and in Exhibit 1) to calculate cash flow before financing and net proceeds from sale, a DCF method was used to arrive at a NPV of $216,789 and IRR of 13.3% for a 5-year holding period at assumed vacancy of 5% (Exhibit 1). As mentioned earlier, this IRR exceeds the 12.5% initially set out, and therefore seems like a feasible project. Using a higher vacancy rate of 7%, however, lowers the IRR to a point that is no longer feasible. If holding all else same, a vacancy of 7% on the building yields a NPV of $122,420 and an IRR of 11.47% (please see table below and Exhibit 2). This IRR does not meet the minimum required and therefore the assumption of vacancy rates staying at 5% is paramount to our analysis. This aspect of the analysis is considerably risky as an assumed vacancy rate does not necessarily yield a guaranteed rate. If vacancy happens to rise, then the valuation of the property is far different than what was originally envisioned.

The agreement did not include any personal property, but it did cover: " All buildings, plumbing, heating, lighting fixtures, storm sash, shades, blinds, awnings, shrubbery, and plants". The purchasers took possession on June 14, 1946, and discovered that certain articles which had been on the premises at the

Agro-Chem, Inc. is a regional producer of agricultural chemicals based in Houston Texas that needs help making a lease versus purchase decision. By understanding the material presented, we will be able to come to a decision. However, after reviewing the information presented, there are a few problems that need to be investigated before finalizing our recommendation. Agro-Chem, Inc. chose to go with the financial manager’s idea of using a discount rate of 14% (average risk) to figure out the present value costs of leasing and purchasing even though the assistant treasure suggested a 12% (low risk) discount rate. Agro-Chem, Inc. brought in the company’s CPA to help settle the debate

2. Due to the circumstances of the contract (that it be for sale of land) specific performance will be awarded.

One of the claims in this proceeding is the BEP Blue Gum Project which was formerly owned by Euan Pescott, brother to Roger Pescott. In 1999, Euan Pescott and BEP Management Pty Ltd entered into an agreement that requires BEP to establish and manage a eucalyptus plantation on the land provided by Euan Pescott. As a result, Euan Pescott had made a total payment of $ 1,076,253.46 to BEP throughout the years. In 2007, the directors of Environinvest decided to purchase the project by creating a document which is alleged to bear the false date of 1st July 1999. It acts as a false documentation of purchase, and with that Euan Pescott transferred the plantation to S.T.Y.A with the total amount

(d) The present value of the minimum lease payments is at 90% of the fair value of the leased asset to the lessor.

D) There is generally no option to continue the lease at a rent lower than market value.

The second appraisal had the extraordinary assumption that the property would be leased to Tesla Motors at $23 per square foot. Based on the assumption that all 25 thousand square feet would be leased at that rate, the appraisers reported that the market value was $8,510,000, over three million more than what they said it was three months prior.

where r is the rental rate per square meter of floor space and s is the total size of the shopping

The cost of implementation of the options: It deals with the technicians and the reduction in time of implementation. This leads to better customer service and increases efficiency of the technicians. Also considering a customer base reduction of 5% (Exhibit 2), $1 million dollars will be a prudent investment.

The partners have chosen to sign a long-term lease in a newly constructed building that will house retail space on the first floor and the remaining floors will house additional office

It is important to note the large discrepancy in AMG’s and Forsythe’s estimates of the book value of hardware. Based on Forsythe’s 10.1% equity insertion rate, they are estimating the salvage value to be $87.10/unit, versus AMG’s $150 estimate. It is possible Forsythe has inflated this estimate to increase the lease payments, that AMG is overestimating the value, or a combination of both. If we calculate the NPV of the 24 month buying option by using Forsythe’s equity insertion rate as the salvage value, there is an NPV of $(5,217,043), making this option even less attractive.

As our payoff estimates are changing favourability of options too close to the base case scenario, we cannot make sound recommendations at this time. A slight change in the probability of the lease being granted or our ability to develop or good reputation reverses our optimal decision.

The subject matter of the case is presented as a negotiation between a real estate developer, Hawkins, and a possible anchor tenant, Discount Marketplace. Both parties are represented by professional negotiators: Myra Hart is representing the Hawkins Company and Genia is representing the Discount Marketplace.