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<br />The pro-forma uses conservative assumptions for property value growth and market assumptions for <br />vacancy and operating expenses. The model assumes that assessed property values increase by 2% per <br />year. The vacancy rate is assumed at 5% of rental income and operating expenses are estimated at 25% <br />of rental income, both standard assumptions in financial underwriting. The financial information is <br />based on projections prior to financing, tenanting, and construction. The cap rate was 7.5%. <br /> <br /> <br />With MUPTEYear 1Year 2Year 10 <br /> <br /> <br />Rent Income$ 347,772 $ 351,250 $ 380,353 <br /> <br /> <br /> - Vacancy (5%)$ 17,389$ 17,562$ 19,018 <br /> <br /> = Effective Gross Rent$ 330,383 $ 333,687 $ 361,335 <br /> <br /> <br /> - Operating Exp$ 86,943$ 87,812$ 95,088 <br /> <br /> - Property Tax <br />$ (39,729)$ (40,524)$ (47,480) <br /> <br />(saved by MUPTE) <br /> <br /> = NOI$ 283,170 $ 286,399 $ 313,728 <br /> <br /> <br /> - Debt Service$ 199,404 $ 199,404 $ 199,404 <br /> <br /> = CF$ 83,766$ 86,995$ 114,324 <br /> <br />Cash on Cash Return 5%5%7% <br /> <br /> <br />Value$ 3,776,000$ 3,819,000$ 4,183,000 <br /> <br /> <br />dsc 1.42 <br /> <br />The Pro-Forma above shows that the project improves with the MUPTE. The debt service coverage is <br />1.42. The Cash on Cash return reaches 7% by year 10. The project valuation is 66% loan to value. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> S:\CMO\2012 Council Agendas\M120123\S1201235.doc <br />