a. You are considering acquiring a building with a Dollar General as tenant and the followingfinancial terms and performance ratios (see graphic). You want to buy it at an 8.5 cap. What is youroffer, at the 8.5 cap? Show your work.PROPERTY INFOFINANCIAL SUMMARYTenantDollar GeneralPurchase Price$1,519,661*Street Address511 Old Route 15Cap Rate6.80%CityPort TrevortonNet Operating Income$103,337StatePAPrice / SF$167Zip17864Rent/SF$40*Offering 2.5% Fee to Buy-Side BrokerAPN05-05-003DOLLAR GENERALCONTACT INFORMATIONGLA9,100 SFListing AgentNina McGaughyLot Size1.31 ACPhone Number(424) 325-2624Year Built2019INVESTMENT HIGHLIGHTSAbsolute Net (NNN) InvestmentDollar General operates on an Absolute Net (NNN) Lease with tenant fully responsible for maintenance,insurance and taxes providing the landlord with a low maintenance assetDOLLAR GENERALCorporate GuaranteeDollar General Corporation (NYSE:DG) is a fortune 500 company with over 80 years in business and $25.6billion in revenue FY'18.Future Rent Growth-10% Increases In Each Option PeriodThere are 10% rental increases built into the lease in each option period, providing the landlord with positiverent growth and a hedge against inflation..Strong Tenant CommitmentThe lease features an initial term of 15 Years with an additional three (3) 5-year options to extend the leasew OpanNERALRepresentative Photo

Net operating income is the necessary factor to be considered in purchase of property and using cap…

cial terms and performance ratios (see graphic). You want to buy it at an 8.5 cap. What is your , at the 8.5 cap? Show your work. PROPERTY INFO FINANCIAL SUMMARY Tenant Dollar General Purchase Price $1,519,661* Street Address 511 Old Route 15 Cap Rate 6.80% City Port Trevorton Net Operating Income $103,337 State PA Price / SF $167 Zip 1/864 Rent/SF $40 *Offering 2.5% Fee to Buy-Side Broker APN 05-05-003

cial terms and performance ratios (see graphic). You want to buy it at an 8.5 cap. What is your , at the 8.5 cap? Show your work. PROPERTY INFO FINANCIAL SUMMARY Tenant Dollar General Purchase Price $1,519,661* Street Address 511 Old Route 15 Cap Rate 6.80% City Port Trevorton Net Operating Income $103,337 State PA Price / SF $167 Zip 1/864 Rent/SF $40 *Offering 2.5% Fee to Buy-Side Broker APN 05-05-003

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter19: Lease Financing

Section: Chapter Questions

Problem 1P: Reynolds Construction (RC) needs a piece of equipment that costs 200. RC can either lease the...

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