Washington / Allen Center

Transcription

1 East Washington Blvd. Pasadena, Ca PROPERTY HIGHLIGHTS Hard Signalized Washington / Allen Corner. Long Term Stabilized Tenants Ample on Site Parking Internet Resistant Tenancy DRE# Well Maintained, Pride of Ownership. Phone: Fax: N. Verdugo Road Glendale, CA

2 Table of Contents Investment Details... 3 Executive Summary... 4 Property Description... 5 Property Photos... 6 Professional Bio... 7 Summary Lease Analysis... 8 Tenant Cash Flow... 9 Lease Rent Roll Resale Report Tenant Mix Report Internal Rate of Return Financial Summary Cash Flow Analysis Financial Indicators Cumulative Analysis Detailed General Annual Property Operating Loan Analysis Cash In Cash Out Property Resale Analysis Investment Return Annual Property Operating Data per Sq Property Equity Analysis Gross Income Vs. Operating Equity vs. Debt Cumulative Wealth Operating Income Lease Expiration Analysis... 35

3 INVESTMENT DETAILS ANALYSIS Analysis Date May 2018 PROPERTY Property Property Address East Washington Blvd. Pasadena, Ca Year Built 1978 PURCHASE INFORMATION Property Type Shopping Center Purchase Price $3,200,000 Tenants 5 Total Rentable Sq. Ft. 6,100 Resale Valuation 5.0% (capitalization of noi) Resale Expenses 5.0% FINANCIAL INFORMATION Down Payment $1,600,000 LOANS Type Debt Term Amortization Rate Payment LO Costs Fixed $1,600, years 25 years 5.0% $9,353 INCOME & EXPENSES Gross Operating Income $208,383 Monthly GOI $17,365 Total Annual Expenses ($50,002) Monthly Expenses ($4,167) Page 3

4 EXECUTIVE SUMMARY Acquisition Costs Purchase Price, Points and Closing Costs $3,200,000 Investment - Cash $1,600,000 First Loan $1,600,000 Investment Information Purchase Price $3,200,000 Price per Tenant $640,000 Price per Sq. Ft. $ Income, Expenses & Cash Flow Gross Scheduled Income $208,383 Total Vacancy and Credits $0 Operating Expenses ($50,002) Net Operating Income $158,381 Debt Service ($112,241) Cash Flow Before Taxes $46,140 Financial Indicators Cash on Cash Return Before Taxes 2.88% Debt Coverage Ratio 1.41 Capitalization Rate 4.95% Gross Income / Square Feet $34.16 Gross Expenses / Square Feet ($8.20) Operating Expense Ratio 24.00% Page 4

5 PROPERTY DESCRIPTION Washington / Allen Shopping Center Hard / Signalized Corner Hard to find signalized corner shopping center, compromises of long stabilized tenants, great mix of services and food related businesses great traffic count. Well maintained and clean center for a long term hold. Page 5

6 PROPERTY PHOTOS Great Corner Shopping Center Hard / Signalized Corner Page 6

7 PROFESSIONAL BIO Distinguish Yourself: Hire a CCIM, CPM Commercial Real Estate owners, users and investors are increasingly looking to the expertise of Certified Commercial Investment Members. CCIMs are backed by an exceptional education in investment Real Estate and a thorough understanding of the market place. Individual investors, small businesses, corporations and institutions look to CCIMs for knowledgeable direction in all aspects of the commercial property transaction. Discover why only 4% ommercial Real Estate professionals hold the elite CCIM designation. Ara is a graduate in Civil Engineering from Greenwich University in London, England. Ara has experience in Building Contracting since 1987 (planning, implementation, construction). Ara is a Registered Investment Advisor and has managed his own Hedge Fund (Equity and Securities Market) since Achievements Dilbeck Realtors "Rookie of the Year Award" Dilbeck Realtors "Award of Excellence" Dilbeck Realtors "Award of Merit" Dilbeck Realtors"Award Of Merit" Dilbeck Realtors "Award of Merit" Dilbeck Realtors "Commercial Associate of the Year" Dilbeck Realtors "Award of Achievement" Dilbeck Realtors "Award of Achievement" Dilbeck Realtors "Commercial Associate of the Year" Dilbeck Realtors "Commercial Associate of the Year" Dilbeck Realtors "Commercial Associate of the Year" Dilbeck Realtors "Winner Circle Award" Dilbeck Realtors "Award of Excellence" Dilbeck Realtors "President Council" Real Living Real Estate "Top Team Award, GCI" Dilbeck Realtors "Commercial Associate of the Year" Dilbeck Realtors "Winner Circle Award" Dilbeck Realtors "Award of Excellence" Dilbeck Realtors "President Council" Real Living Real Estate "Top Team Award, GCI" Page 7

8 SUMMARY LEASE ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Lease Revenue Base Rental Income $187,059 $193,182 $197,089 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Potential Lease Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Lease Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Lease Cash Flow $187,059 $193,182 $197,089 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 Additional Information Sq. Ft. Expires 0 1,324 1,221 3,511 1,890 1,890 3,214 3,111 3,511 1,890 Dollars Expires $21,324 $64,992 $62,438 $114,110 $65,593 $65,593 $109,260 $106,706 $114,110 $65,593 Page 8

9 TENANT CASH FLOW ANALYSIS Tenant: Cojo Coin Laundry Suite: 1794, 1,890 sf Expiration Date: 12/31/2021 Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Tenant Revenue Base Rental Income $40,917 $42,145 $43,409 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Revenue $40,917 $42,145 $43,409 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 Per rsf $21.65 $22.30 $22.97 $23.42 $23.42 $23.42 $23.42 $23.42 $23.42 $23.42 Potential Tenant Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tenant Net Cash Flow $40,917 $42,145 $43,409 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 $44,269 Per rsf $21.65 $22.30 $22.97 $23.42 $23.42 $23.42 $23.42 $23.42 $23.42 $23.42 Page 9

10 TENANT CASH FLOW ANALYSIS Tenant: Supper Cleaner Suite: 1798, 1,621 sf Expiration Date: 12/31/2021 Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Tenant Revenue Base Rental Income $44,844 $46,189 $47,575 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Revenue $44,844 $46,189 $47,575 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 Per rsf $27.66 $28.49 $29.35 $29.93 $29.93 $29.93 $29.93 $29.93 $29.93 $29.93 Potential Tenant Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tenant Net Cash Flow $44,844 $46,189 $47,575 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 $48,517 Per rsf $27.66 $28.49 $29.35 $29.93 $29.93 $29.93 $29.93 $29.93 $29.93 $29.93 Page 10

11 TENANT CASH FLOW ANALYSIS Tenant: Spuds Burgers Suite: 1802, 1,221 sf Expiration Date: 9/30/2020 Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Tenant Revenue Base Rental Income $36,874 $39,856 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Revenue $36,874 $39,856 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 Per rsf $30.20 $32.64 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 Potential Tenant Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tenant Net Cash Flow $36,874 $39,856 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 $41,114 Per rsf $30.20 $32.64 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 $33.67 Page 11

12 TENANT CASH FLOW ANALYSIS Tenant: Mijares Restaurant Suite: 1804, 1,324 sf Expiration Date: 6/30/2019 Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Tenant Revenue Base Rental Income $43,100 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Revenue $43,100 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 Per rsf $32.55 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 Potential Tenant Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tenant Net Cash Flow $43,100 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 $43,668 Per rsf $32.55 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 $32.98 Page 12

13 TENANT CASH FLOW ANALYSIS Tenant: Collected CAM Suite: CAM, 0 sf Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Potential Tenant Revenue Base Rental Income $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 Lease-up Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Rent Abatement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Turnover Vacancy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Expense Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Revenue $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 Per rsf N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Potential Tenant Costs Tenant Improvements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Leasing Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Potential Costs $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Tenant Net Cash Flow $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 $21,324 Per rsf N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Page 13

14 LEASE RENT ROLL Suite Tenant Start Date Expire Date RSF $/RSF Annualized Rent Tenant Renewal Commissions Improvement Term Renewal Increase 1794 Cojo Coin Laundry 01/01/ /31/2021 1,890 $21.65 $40,917 $0.00 $ year $0.00 Notes 1798 Supper Cleaner 01/01/ /31/2021 1,621 $27.66 $44,844 $0.00 $ years $ Spuds Burgers 10/01/ /30/2020 1,221 $30.20 $36,874 $0.00 $ years $ Mijares Restaurant 07/01/ /30/2019 1,324 $32.55 $43,100 $0.00 $ years $0.00 CAM Collected CAM 0 N/A $21,324 $0.00 $ year N/A Page 14

15 RESALE REPORT NET PROCEEDS FROM SALE Adjusted Basis Basis At Acquisition $3,200,000 -Depreciation ($813,632) Adjusted Basis at Sale $2,386,368 Capital Gain Sale Price $3,404,256 -Sale Expenses ($170,213) -Adjusted Basis at Sale ($2,386,368) Gain or (Loss) $847,675 -Depreciation (limited to gain) ($813,632) Capital Gain from Appreciation $34,043 Sales Proceeds After Tax Sale Price $3,404,256 -Sale Expenses ($170,213) -Mortgage Balance ($1,182,792) Sale Proceeds Before Tax $2,051,252 -Tax On Depreciation ($203,408) -Tax On Capital Gain Sale Proceeds After Tax $1,847,844 Page 15

16 TENANT MIX REPORT Suite Tenants Approx. SqFt Avg. Rents Monthly Mkt Rents Monthly 1794 Cojo Coin Laundry 1890 $3,376 $3,376 $3,376 $3, Supper Cleaner 1621 $3,700 $3,700 $3,700 $3, Spuds Burgers 1221 $2,930 $2,930 $2,930 $2, Mijares Restaurant 1324 $3,355 $3,355 $3,355 $3,355 CAM Collected CAM 0 $1,777 $1,777 $1,777 $1, ,056 $15,139 $15,139 TENANT MIX TENANT MIX SQUARE FEET Cojo Coin Laundry Supper Cleaner Spuds Burgers Mijares Restaurant Collected CAM Cojo Coin Laundry Supper Cleaner Spuds Burgers Mijares Restaurant Collected CAM TENANT MIX INCOME TENANT MIX MARKET INCOME Cojo Coin Laundry Supper Cleaner Spuds Burgers Mijares Restaurant Collected CAM Cojo Coin Laundry Supper Cleaner Spuds Burgers Mijares Restaurant Collected CAM Page 16

17 INTERNAL RATE OF RETURN ANALYSIS BEFORE TAX IRR Time Future Cash Flows Initial Investment ($1,600,000) End of Year 1 $46,140 End of Year 2 $52,262 End of Year 3 $56,170 End of Year 4 $57,972 End of Year 5 $57,972 End of Year 6 $57,972 End of Year 7 $57,972 End of Year 8 $57,972 End of Year 9 $57,972 End of Year 10* $2,109,223 IRR = 5.65% * ($57,972 + $2,051,252) AFTER TAX IRR Time Future Cash Flows Initial Investment ($1,600,000) End of Year 1 $46,140 End of Year 2 $52,262 End of Year 3 $56,170 End of Year 4 $57,972 End of Year 5 $57,972 End of Year 6 $57,972 End of Year 7 $57,972 End of Year 8 $57,972 End of Year 9 $57,972 End of Year 10* $1,905,815 IRR = 4.73% * ($57,972 + $1,847,844) Page 17

18 FINANCIAL SUMMARY Asking Price $3,200,000 Cap Rate 4.78% Net Operating Income $152,985 Rent/Month $3,376 Rentable Square Feet 6,100 Land Area 16,222 sf Tenant Name Cojo Coin Laundry Ownership Type Fee Simple Lease Term 3 years Rent Commencement 01/01/2017 Lease Expiration Date Options 12/31/2021 Seven (7), One (1) year INVESTMENT HIGHLIGHTS Hard Signalized Washington / Allen Corner. Internet Resistant Tenancy Long Term Stabilized Tenants Well Maintained, Pride of Ownership. Ample on Site Parking RENT SCHEDULE Term Increase Annual Rent Monthly Rent PER/SF 1 $40,917 $3, $ % $42,145 $3, $ % $43,409 $3, $7.12 Option 1 4 $44,269 $3, $7.26 Option 2 5 $44,269 $3, $7.26 Option 3 6 $44,269 $3, $7.26 Option 4 7 $44,269 $3, $7.26 Option 5 8 $44,269 $3, $7.26 Option 6 9 $44,269 $3, $7.26 Option 7 10 $44,269 $3, $7.26 Page 18

19 CASH FLOW ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $208,383 $214,506 $218,413 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 Total Operating Expenses ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) NET OPERATING INCOME $158,381 $164,504 $168,411 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 Loan Payment ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) ($112,241) NET CASH FLOW (b/t) $46,140 $52,262 $56,170 $57,972 $57,972 $57,972 $57,972 $57,972 $57,972 $57,972 Cash On Cash Return b/t 2.88% 3.27% 3.51% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% * b/t = before taxes;a/t = after taxes Page 19

20 FINANCIAL INDICATORS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier Capitalization Rate 4.95% 5.14% 5.26% 5.32% 5.32% 5.32% 5.32% 5.32% 5.32% 5.32% Cash On Cash Return b/t 2.88% 3.27% 3.51% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% Cash On Cash Return a/t 2.88% 3.27% 3.51% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% 3.62% Debt Coverage Ratio Gross Income per Sq. Ft. $34.16 $35.16 $35.81 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 Expenses per Sq. Ft. ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) Net Income Multiplier Operating Expense Ratio 24.00% 23.31% 22.89% 22.71% 22.71% 22.71% 22.71% 22.71% 22.71% 22.71% Loan To Value Ratio 47.63% 45.49% 43.94% 42.82% 41.63% 40.39% 39.08% 37.71% 36.26% 34.74% * b/t = before taxes; a/t = after taxes Page 20

21 CUMULATIVE ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $90,070 $168,223 $204,256 $204,256 $204,256 $204,256 $204,256 $204,256 $204,256 $204,256 Equity (loan reduction) $32,991 $67,669 $104,121 $142,439 $182,717 $225,056 $269,560 $316,342 $365,517 $417,208 CASH FLOW (a/t) $46,140 $98,402 $154,572 $212,544 $270,515 $328,487 $386,458 $444,430 $502,401 $560,373 Totals - To Date $169,201 $334,294 $462,950 $559,239 $657,489 $757,799 $860,275 $965,028 $1,072,175 $1,181,838 Invested Capital ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ROIC - To Date 10.58% 20.89% 28.93% 34.95% 41.09% 47.36% 53.77% 60.31% 67.01% 73.86% * a/t = after taxes; ROIC = Return On Invested Capital Page 21

22 DETAILED GENERAL EXPENSES Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total Expenses ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) Building Insurance ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) Grounds Maintenance ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) Taxes - Personal Property New ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) Utility - Water ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) Utility - Gas ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) Utility - Other / Trash ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) Page 22

23 ANNUAL PROPERTY OPERATING DATA Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $187,059 $193,182 $197,089 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 $198, CAM $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8, CAM $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9, CAM $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 GROSS SCHEDULED INCOME $208,383 $214,506 $218,413 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 GROSS OPERATING INCOME $208,383 $214,506 $218,413 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 Expenses Building Insurance ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) Grounds Maintenance ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) Taxes - Personal Property New ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) Utility - Water ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) Utility - Gas ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) Utility - Other / Trash ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) TOTAL OPERATING EXPENSES ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) NET OPERATING INCOME $158,381 $164,504 $168,411 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 Page 23

24 LOAN ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 LOAN 1 Debt Service Analysis Principal Payments $32,991 $34,678 $36,453 $38,318 $40,278 $42,339 $44,505 $46,782 $49,175 $51,691 Interest Payments $79,251 $77,563 $75,789 $73,924 $71,963 $69,903 $67,737 $65,460 $63,066 $60,550 Total Debt Service $112,241 $112,241 $112,241 $112,241 $112,241 $112,241 $112,241 $112,241 $112,241 $112,241 Principal Balance Analysis Beginning Principal Balance $1,600,000 $1,567,009 $1,532,331 $1,495,879 $1,457,561 $1,417,283 $1,374,944 $1,330,440 $1,283,658 $1,234,483 Principal Reductions $32,991 $34,678 $36,453 $38,318 $40,278 $42,339 $44,505 $46,782 $49,175 $51,691 Ending Principal Balance $1,567,009 $1,532,331 $1,495,879 $1,457,561 $1,417,283 $1,374,944 $1,330,440 $1,283,658 $1,234,483 $1,182,792 Page 24

25 CASH IN CASH OUT Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $187,059 $193,182 $197,089 $198,891 $198,891 $198,891 $198,891 $198,891 $198,891 $198, CAM $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8,796 $8, CAM $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9,528 $9, CAM $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 GROSS SCHEDULED INCOME $208,383 $214,506 $218,413 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 GROSS OPERATING INCOME $208,383 $214,506 $218,413 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 $220,215 Expenses Building Insurance ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) ($3,237) Grounds Maintenance ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) Taxes - Personal Property New ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) ($40,000) Utility - Water ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) ($2,086) Utility - Gas ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) ($853) Utility - Other / Trash ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) ($3,226) TOTAL OPERATING EXPENSES ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) ($50,002) NET OPERATING INCOME $158,381 $164,504 $168,411 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 $170,213 Debt Service Loan Interest ($79,251) ($77,563) ($75,789) ($73,924) ($71,963) ($69,903) ($67,737) ($65,460) ($63,066) ($60,550) Principal Payments ($32,991) ($34,678) ($36,453) ($38,318) ($40,278) ($42,339) ($44,505) ($46,782) ($49,175) ($51,691) * Cash Flow IRR based upon net cash flow and principal payments Page 25

26 CASH IN CASH OUT Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 NET CASH FLOW (b/t) $46,140 $52,262 $56,170 $57,972 $57,972 $57,972 $57,972 $57,972 $57,972 $57,972 Cash Flow IRR N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Projected Property Value $3,290,070 $3,368,223 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 Resale Expenses ($164,504) ($168,411) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) Proceeds b/f Debt Payoff $3,125,567 $3,199,812 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 Loan Principal Balance ($1,567,009) ($1,532,331) ($1,495,879) ($1,457,561) ($1,417,283) ($1,374,944) ($1,330,440) ($1,283,658) ($1,234,483) ($1,182,792) Net Proceeds From Sale $1,558,557 $1,667,481 $1,738,165 $1,776,483 $1,816,760 $1,859,099 $1,903,604 $1,950,386 $1,999,561 $2,051,252 Net Resale IRR 0.29% 5.13% 5.92% 5.83% 5.77% 5.74% 5.71% 5.68% 5.67% 5.65% * Cash Flow IRR based upon net cash flow and principal payments Page 26

27 PROPERTY RESALE ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projected Property Value $3,290,070 $3,368,223 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 $3,404,256 Resale Expenses ($164,504) ($168,411) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) ($170,213) Proceeds b/f Debt Payoff $3,125,567 $3,199,812 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 $3,234,043 Basis at Acquisition $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 $3,200,000 Depreciation ($78,624) ($160,672) ($242,720) ($324,768) ($406,816) ($488,864) ($570,912) ($652,960) ($735,008) ($813,632) Adjusted Tax Basis $3,121,376 $3,039,328 $2,957,280 $2,875,232 $2,793,184 $2,711,136 $2,629,088 $2,547,040 $2,464,992 $2,386,368 Resale Tax Gain (Loss) $4,191 $160,484 $276,763 $358,811 $440,859 $522,907 $604,955 $687,003 $769,051 $847,675 Resale Tax Benefit (Cost) ($1,048) ($40,121) ($60,680) ($81,192) ($101,704) ($122,216) ($142,728) ($163,240) ($183,752) ($203,408) Loan Principal Balance ($1,567,009) ($1,532,331) ($1,495,879) ($1,457,561) ($1,417,283) ($1,374,944) ($1,330,440) ($1,283,658) ($1,234,483) ($1,182,792) Net Resale Proceeds $1,557,509 $1,627,360 $1,677,485 $1,695,291 $1,715,056 $1,736,883 $1,760,876 $1,787,146 $1,815,809 $1,847,844 * b/f = before Page 27

28 INVESTMENT RETURN ANALYSIS Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Cash Flow - To Date $46,140 $98,402 $154,572 $212,544 $270,515 $328,487 $386,458 $444,430 $502,401 $560,373 Net Resale Proceeds $1,557,509 $1,627,360 $1,677,485 $1,695,291 $1,715,056 $1,736,883 $1,760,876 $1,787,146 $1,815,809 $1,847,844 Invested Capital ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) ($1,600,000) Net Return on Investment $3,650 $125,762 $232,057 $307,834 $385,572 $465,370 $547,334 $631,575 $718,210 $808,217 Internal Rate of Return 0.23% 3.91% 4.75% 4.69% 4.67% 4.67% 4.68% 4.69% 4.70% 4.73% Modified IRR 0.23% 3.86% 4.62% 4.50% 4.41% 4.35% 4.29% 4.25% 4.21% 4.17% NPV (cash flow + reversion) $4,697 $165,883 $292,737 $389,026 $487,276 $587,586 $690,062 $794,815 $901,962 $1,011,625 PV (NOI + reversion) $3,283,948 $3,522,697 $3,725,340 $3,895,552 $4,065,765 $4,235,978 $4,406,191 $4,576,404 $4,746,616 $4,916,829 * a/t = after taxes; Modified IRR = Modified Internal Rate of Return; PV = Present Value; NPV = Net Present Value; NOI = Net Operating Income Page 28

29 ANNUAL PROPERTY OPERATING DATA PER SQ. Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $30.67 $31.67 $32.31 $32.61 $32.61 $32.61 $32.61 $32.61 $32.61 $32.61 Miscellaneous Income $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 $3.50 GROSS SCHEDULED INCOME $34.16 $35.16 $35.81 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 GROSS OPERATING INCOME $34.16 $35.16 $35.81 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 $36.10 Expenses Building Insurance ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) Grounds Maintenance ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) ($0.10) Taxes - Personal Property New ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) ($6.56) Utility - Water ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) ($0.34) Utility - Gas ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) ($0.14) Utility - Other / Trash ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) ($0.53) TOTAL OPERATING EXPENSES ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) ($8.20) NET OPERATING INCOME $25.96 $26.97 $27.61 $27.90 $27.90 $27.90 $27.90 $27.90 $27.90 $27.90 Page 29

30 PROPERTY EQUITY ANALYSIS $2,300,000 $2,070,000 $1,840,000 $1,610,000 $1,380,000 $1,150,000 $920,000 $690,000 $460,000 $230,000 Year Legend Initial Equity Equity (loan reduction) Equity (appreciation) Page 30

31 GROSS INCOME VS. OPERATING EXPENSES $230,000 $207,000 $184,000 $161,000 $138,000 $115,000 $92,000 $69,000 $46,000 $23,000 Year Legend GROSS SCHEDULED INCOME Total Operating Expenses Page 31

32 EQUITY VS. DEBT $2,300,000 $2,070,000 $1,840,000 $1,610,000 $1,380,000 $1,150,000 $920,000 $690,000 $460,000 $230,000 Year Legend Equity Loan Principal Balance Page 32

33 CUMULATIVE WEALTH ANALYSIS $1,200,000 $1,080,000 $960,000 $840,000 $720,000 $600,000 $480,000 $360,000 $240,000 $120,000 Year Legend Equity (loan reduction) Equity (appreciation) CASH FLOW (a/t) Page 33

34 OPERATING INCOME ANALYSIS $230,000 $207,000 $184,000 $161,000 $138,000 $115,000 $92,000 $69,000 $46,000 $23,000 Year Legend GROSS OPERATING INCOME NET OPERATING INCOME NET CASH FLOW (b/t) Page 34

35 LEASE EXPIRATION ANALYSIS 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Year Legend Percentage of Expired Space Percentage of Expired Base Rent Page 35