Referring to the example in Figure 13.2(a), suppose the market rent for a two-bedroom unit is $550 per month and for a three-bedroom unit is $650 per month. If the going cap rate is 10%, rework the pro forma calculations for the apartment project of Figure 13.2. Then determine the lender's interest rate assuming the developer's interest rate as 12%. What is the new breakeven vacancy factor assuming that the debt service is the same? Market rent for subject property (unfurnished) 55 two-bedroom A, B, or C units-1167 sq ft @ 41.0 cents/sq ft = $478.47/mo or $480 x 55 $ 20 three-bedroom A, B units–1555 sq ft @ 37.3 cents/sq ft = $580.00/ mo $580 x 20 26,400.00 11,600.00 Total estimated monthly income Other income: Coin laundry, vending machine 38,000.00 150.00 %24 457,800.00 38,150.00 x 12 = annual total Less vacancy factor of 5% (based on historical data) -22,890.00 Adjusted gross annual income Less estimated expenses @ 29.45% 434,910.00 -128,080.00 Net income before debt service $ 306,830.00 306,830.00 Capitalized value @ 9.5% = $3,229,789.00 = (0.095) = $2,422,000.00 = 75% (high) governed by law Requested loan value Loan/value ratio Long-term debt service @ 9.75% constant = $236,145.00 Debt service coverage ratio Loan per unit Loan per square foot = 1.3 = $32293.33 = $25.42
Referring to the example in Figure 13.2(a), suppose the market rent for a two-bedroom unit is $550 per month and for a three-bedroom unit is $650 per month. If the going cap rate is 10%, rework the pro forma calculations for the apartment project of Figure 13.2. Then determine the lender's interest rate assuming the developer's interest rate as 12%. What is the new breakeven vacancy factor assuming that the debt service is the same? Market rent for subject property (unfurnished) 55 two-bedroom A, B, or C units-1167 sq ft @ 41.0 cents/sq ft = $478.47/mo or $480 x 55 $ 20 three-bedroom A, B units–1555 sq ft @ 37.3 cents/sq ft = $580.00/ mo $580 x 20 26,400.00 11,600.00 Total estimated monthly income Other income: Coin laundry, vending machine 38,000.00 150.00 %24 457,800.00 38,150.00 x 12 = annual total Less vacancy factor of 5% (based on historical data) -22,890.00 Adjusted gross annual income Less estimated expenses @ 29.45% 434,910.00 -128,080.00 Net income before debt service $ 306,830.00 306,830.00 Capitalized value @ 9.5% = $3,229,789.00 = (0.095) = $2,422,000.00 = 75% (high) governed by law Requested loan value Loan/value ratio Long-term debt service @ 9.75% constant = $236,145.00 Debt service coverage ratio Loan per unit Loan per square foot = 1.3 = $32293.33 = $25.42
Chapter2: Loads On Structures
Section: Chapter Questions
Problem 1P
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Transcribed Image Text:Referring to the example in Figure 13.2(a), suppose the market rent for a two-bedroom unit is $550 per month and for a three-bedroom unit is
$650 per month. If the going cap rate is 10%, rework the pro forma calculations for the apartment project of Figure 13.2. Then determine the lender's
interest rate assuming the developer's interest rate as 12%. What is the new breakeven vacancy factor assuming that the debt service is the same?
Market rent for subject property (unfurnished) 55 two-bedroom A, B,
or C units-1167 sq ft @ 41.0 cents/sq ft = $478.47/mo or $480 x 55 $
20 three-bedroom A, B units–1555 sq ft @ 37.3 cents/sq ft = $580.00/
mo $580 x 20
26,400.00
11,600.00
Total estimated monthly income
Other income: Coin laundry, vending machine
38,000.00
150.00
%24
457,800.00
38,150.00
x 12 = annual total
Less vacancy factor of 5% (based on historical data)
-22,890.00
Adjusted gross annual income
Less estimated expenses @ 29.45%
434,910.00
-128,080.00
Net income before debt service
$ 306,830.00
306,830.00
Capitalized value @ 9.5% = $3,229,789.00 =
(0.095)
= $2,422,000.00
= 75% (high) governed by law
Requested loan value
Loan/value ratio
Long-term debt service @ 9.75% constant = $236,145.00
Debt service coverage ratio
Loan per unit
Loan per square foot
= 1.3
= $32293.33
= $25.42
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