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A developer is building a Data Centre in Longeuil, Quebec. She has already negociated a lease with one operator, who will take up the entire building. The operator will move in and start paying

rent as soon as construction is finished.

Lease, financing and market data are shown below.

a$)$ Based on the budget, calculate the outstanding construction loan at the end construction.

b$)$ The developer plans to take$-$out a mortgage at the end of construction, when the lease starts. How much equity will she be able to withdraw?

Please make your calculations to the right of the data on this worksheet.

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Grade $($out of $10)$:

Construction loan:

Cash flows:

The land is purchased and site preparation will be

paid in the first month. The hard costs will be

evenly distributed over months $2$ to $10.$ The soft

costs $($excluding interest$)$ are evenly distributed

over the $10$ month period. All cash flows oceur at

the end of the month.

Development Budget:

Lease:

Type

Mortgage loan:

Term $($years$)$

Amortization period $($years$)$

Mortgage rate

MasimumLTVA developer is building a Data Centre in Longeuil, Quebec. She has already negociated a lease with one operator, who will take up the entire building. The operator will move in and start paying rent as soon as construction is finished.

Lease, financing and market data are shown below.

a$)$ Based on the budget, calculate the outstanding construction loan at the end of construction.

b$)$ The developer plans to take$-$out a mortgage at the end of construction, when the lease starts. How much equity will she be able to withdraw?

Please make your calculations to the right of the data on this worksheet. This is an Excel assignment.

Data:

Construction Loan:

LTC $65\%$

Interest Rate $6\%$

Cash Flows:

The land is purchased and site preparation will be paid in the first month. The hard costs will be evenly distributed over months $2$ to $10.$ The soft costs $($excluding interest$)$ are evenly distributed over the $10$ month period. All cash flows occur at the end of the month.

DEVELOPMENT BUDGET:

Land: $1,250,000$

Site Preparation: $25,000$

Hard costs: $4,000,000$

Permits: $50,000$

Property taxes: $100,000$

Insurance: $10,000$

Professionals: $150,000$

$---------------$

Total for this: $5,585,000$

Estimated interest: $60,500$

Final Total: $5,645,500$

LEASE:

Type: NNN $($triple net$)$

Total Base Rent per year: $400,000$

Building Operating Expenses: $75,000$

CAP RATE: $5\mathrm{.}5\%$

MORTGAGE LOAN:

Term $($years$)$: $5$

Ammortization period $($years$)$: $20$

Mortgage rate: $4\mathrm{.}0\%$

Maximum LTV: $75\%$

Minimum DSCR: $1\mathrm{.}25\%$

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