In this project I was challenged to do a full property analysis on the The Edge Avenue North in Philadelphia. In order to evaluate on whether an investor should invest into the property I had to analysis a series of financial data.

1. Assumption Assumption Value Source
Re 12%
Current Vacancy Edge 2%
Natural Vacancy 7.80%
Average Vacancy 5.87%
OER (% of EGI) 50%
L/V 80%
E/V 20%
Loan Term 30
Loan Interest 4.9
Depreciable Basis 85%
Useful Life 30
Holding Period 10
Tax Rate Philadelphia 6%
Loan Organization Fee 1%
Tax Bracket 28%
Appreciation 2%
Sales commission 56.00%

2. Edge Student Village (1,9-12)
Room Type Rent per Bed Inc. Utilities Number of Beds Monthly Rent Annual Rent
Studio Deluxe $1,153.00 1153 1 1153 13836
Penthouse Studio $1,143.00 1143 1 1143 13716
Studio $1,029.00 1029 1 1029 12348
Junior Suite $761.00 761 2 1522 18264
Shared Studio $593.00 593 2 1186 14232
Average Rent Per Bed $935.80
Average Annual Rent $14,479.20
Total Number of Beds Edge $303.00
Total PGI $4,387,197.60
Current Vacancy Edge 2%
Vacancy Value $87,743.95
Misc. $19,200.00
EGI $4,318,653.65
OER 50%
Value of OER $2,159,326.82
NOI $2,159,326.82
Temple Master Lease
Room Type Rent per Bed Inc. Utilities Number of Beds Monthly Rent Annual Rent
Studio Deluxe $1,159.00 $1,159.00 1 $1,159.00 $11,590.00
Single Studio $966.00 $966.00 1 $966.00 $9,660.00
Junior Suite $911.20 $911.20 2 $1,822.40 $18,224.00
Shared Suite $719.00 $719.00 2 $1,438.00 $14,380.00
Average Rent Per Bed $938.80
Average Annual Rent $13,463.50
Total Number of Beds 764
Total PGI $10,286,114.00
Natural Varancy Rate 7.80%
Vacancy Value $802,316.89
Misc. $4,800.00

3. EGI $9,488,597.11
OER 50%
Value of OER $4,744,298.55
NOI $4,744,298.55
Retail Spaces
Retail Rent Per Space Inc. Utilites Space Monthly Rent Annual Rent
Jimmy Johns $6,000.00 $6,000.00 1 $6,000.00 $72,000.00
Pho Ha Sagion $8,000.00 $8,000.00 1 $8,000.00 $96,000.00
Average Rent Per Space $7,000.00
Average Annual Rent Per Space $84,000.00
Total Number of Spaces 2
Total PGI $168,000.00
Natutal Vacancy Rate 7.80%
Vacancy Value $13,104.00
EGI $154,896.00
OER 50%
Value of OER $77,448.00
NOI $77,448.00
NOI Total: $6,981,073.38
PGI Total: $14,841,311.60
TOE $6,981,073.38

4. Capilization Rate
L/V 80%
E/V 20%
Loan Term 30
Mortgage Interest Rate 4.90%
Re 12%
MCm 0.54%
MCa 6.42%
DCR 1.5
BOI Method=R=L/V*MCa+E/V*Re
R 7.54%
Value (NOI/R) $92,636,324.04
Underwriters Method=R = DCR*L/V*MCa
R 7.70%
Value (NOI/R) $90,616,217.29
Market Value $91,626,270.67
Depreciation Basis $77,882,330.07
Useful Life 30
Annual Depreciation $2,596,077.67

5. Amortization Schedule
Market Value $2,800,000.00
L/V 80% $560,000.00
Loan $2,240,000.00
Mortgage Interest 5.00%
Holding Period 5
Amorization Schedule 15
ADS $215,806.72
Year ADS Interest Principle Balance
0 $2,240,000.00
1 $215,806.72 $112,000.00 $103,806.72 $2,136,193.28
2 $215,806.72 $106,809.66 $108,997.06 $2,027,196.22
3 $215,806.72 $101,359.81 $114,446.91 $1,912,749.30
4 $215,806.72 $95,637.47 $120,169.26 $1,792,580.04
5 $215,806.72 $89,629.00 $126,177.72 $1,666,402.32
6 $215,806.72 $83,320.12 $132,486.61 $1,533,915.71
7 $215,806.72 $76,695.79 $139,110.94 $1,394,804.77
8 $215,806.72 $69,740.24 $146,066.49 $1,248,738.29
9 $215,806.72 $62,436.91 $153,369.81 $1,095,368.48
10 $215,806.72 $54,768.42 $161,038.30 $934,330.18

6. Average Vancany Rate 5.87% PGI Total $14,841,311.60
Rental Growth Rate 3% VBD Total $903,164.84
Operating Expense Growth Rate 3% MISC Total $24,000.00
Tax Rate 6% TOE Total $6,981,073.38
Year 0 1 2 3 4 5 6 7 8 9 10
PGI $14,841,311.60 $15,286,550.95 $15,745,147.48 $16,217,501.90 $16,704,026.96 $17,205,147.77 $17,721,302.20 $18,252,941.27 $18,800,529.50 $19,364,545.39
VBD -$871,184.99 -$897,320.54 -$924,240.16 -$951,967.36 -$980,526.38 -$1,009,942.17 -$1,040,240.44 -$1,071,447.65 -$1,103,591.08 -$1,136,698.81
MISC. $24,000.00 $24,720.00 $25,461.60 $26,225.45 $27,012.21 $27,822.58 $28,657.26 $29,516.97 $30,402.48 $31,314.56
EGI $13,994,126.61 $14,413,950.41 $14,846,368.92 $15,291,759.99 $15,750,512.79 $16,223,028.17 $16,709,719.02 $17,211,010.59 $17,727,340.90 $18,259,161.13
TOE -$6,981,073.38 -$7,190,505.58 -$7,406,220.75 -$7,628,407.37 -$7,857,259.59 -$8,092,977.38 -$8,335,766.70 -$8,585,839.70 -$8,843,414.89 -$9,108,717.34
NOI $7,013,053.23 $7,223,444.83 $7,440,148.17 $7,663,352.62 $7,893,253.20 $8,130,050.79 $8,373,952.32 $8,625,170.89 $8,883,926.01 $9,150,443.79
ADS -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$4,714,119.54 -$8,260,997.58
BTCF $2,298,933.69 $2,509,325.29 $2,726,028.63 $2,949,233.08 $3,179,133.66 $3,415,931.25 $3,659,832.78 $3,911,051.35 $4,169,806.47 $889,446.22
Taxes -$137,936.02 -$150,559.52 -$163,561.72 -$176,953.98 -$190,748.02 -$204,955.88 -$219,589.97 -$234,663.08 -$250,188.39 -$53,366.77
ATCF -$73,301,016.54 $2,160,997.67 $2,358,765.77 $2,562,466.91 $2,772,279.09 $2,988,385.64 $3,210,975.38 $3,440,242.81 $3,676,388.26 $3,919,618.08 $836,079.44
-$14,660,203.31 Outstanding Balance $59,249,688.25
400000 Prepayment Penalty Rate 6%
Prepayment Penalty $3,554,981.30
ADS $4,706,016.28
#ERROR! Total ADS Year 10 $8,260,997.58

7. Operating Taxable Income
Loan $733,010,016.54
Financing Cost Rate 1%
Financing Costs $7,330,100.17
Tax Bracket Rate 28%
Annual Dep. $2,596,077.67
Year 1 2 3 4 5 6 7 8 9 10
NOI $7,013,053.23 $7,223,444.83 $7,440,148.17 $7,663,352.62 $7,893,253.20 $8,130,050.79 $8,373,952.32 $8,625,170.89 $8,883,926.01 $9,150,443.79
Interest -$112,000.00 -$106,809.66 -$101,359.81 -$95,637.47 -$89,629.00 -$83,320.12 -$76,695.79 -$69,740.24 -$62,436.91 -$54,768.42
Depreciation -$2,596,077.67 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18 -$2,591,615.18
AFC -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$244,336.67 -$512,365.11
OTI $4,060,638.89 $4,280,683.31 $4,502,836.51 $4,731,763.30 $4,967,672.34 $5,210,778.82 $5,461,304.68 $5,719,478.79 $5,985,537.25 $5,991,695.08
MTR 28% 28% 28% 28% 28% 28% 28% 28% 28% 28%
Taxes $1,136,978.89 $1,198,591.33 $1,260,794.22 $1,324,893.72 $1,390,948.26 $1,459,018.07 $1,529,165.31 $1,601,454.06 $1,675,950.43 $1,677,674.62
AFC $146,602.00
Unamoritized Portion at
end of year 10 $487,966.77
Total AFC at year 10 $512,365.11

8. After-Tax Equity Reversion
Appreciation 2%
Selling Price $111,499,921.70
Selling Expenses -$6,689,995.30
Net Sales Proceeds $104,809,926.40
Unpaid Mortgage Balance $59,249,688.25
Before-Tax Equity Reversion $164,059,614.65
Taxes Due on Sale* -$2,649,097.07
After-Tax Equity Reversion $161,410,517.57
nsp $104,809,926.40 $91,468,771.21
-ab $15,932,850.37 $2,591,695.18
$2,001,173.28 $88,877,076.03
$647,923.80
$2,649,097.07

9. Rules of Thumb
Year 1
PGI $14,841,311.60
(VBD) -$871,849.99
MISC $24,000.00
EGI $13,993,461.61
(TOE) -$6,981,073.38 Sp 111,499,921.70
NOI $7,012,388.23
(ADS) -$4,714,119.54
BTCF $2,298,268.69
(T) -$137,702.22
ATCF $2,160,566.47
Rules of Thumb Based on Year 1
EGIM 7.97%
NIM 15.90% 43012987.34
PGIM 7.51%
OER 49.89%
L/V 80%
DCR 1.49%
Ro 6.29%
EDR 5.34%
ATR 5.02%
BER 0.83%

10. Year CFs
0 -$15,220,403.53
1 $2,160,997.67
2 $2,358,765.77
3 $2,562,466.91
4 $2,772,279.09
5 $2,988,385.64
6 $3,210,975.38
7 $3,440,242.81
8 $3,676,388.26
9 $3,919,618.08
10 $836,079.44
$12,705,795.54 >0 Accepted
12.34% > 12 Accepted