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<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$ 269,568 $ 272,264 $ 294,823 <br /> <br /> <br /> - Vacancy (5%)$ 13,478$ 13,613$ 14,741 <br /> <br /> = Effective Gross Rent$ 256,090 $ 258,650 $ 280,081 <br /> <br /> <br /> - Operating Exp$ 67,392$ 68,066$ 73,706 <br /> <br /> - Property Tax <br />$ (30,795)$ (31,411)$ (36,803) <br /> <br />(saved by MUPTE) <br /> <br /> = NOI$ 219,493 $ 221,996 $ 243,179 <br /> <br /> - Debt Service$ 168,999 $ 168,999 $ 168,999 <br /> <br /> <br /> = CF$ 50,494$ 52,997$ 74,180 <br /> <br />Cash on Cash Return 3%4%5% <br /> <br /> <br />Value$ 2,927,000$ 2,960,000$ 3,242,000 <br /> <br /> <br />dsc 1.30 <br /> <br />The Pro-Forma above shows that the project improves with the MUPTE. The debt service coverage is <br />1.3. The Cash on Cash return reaches 5% by year 10. The project valuation is 78% loan to value. <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />S:\CMO\2012 Council Agendas\M120123\S1201236.doc <br />