Value of Brookline Road Shopping Center 7,165,333

 

For further analysis, we have calculated the Average Growth in Net Operating Income, Average Growth in Net Operating Cash Flow and Average Capital Cost / Net Operating Income Ratio for this property with the assumptions of the 5-year refinancing.

Through above calculated values, we generated the Net Cash Flows of Property by dividing with the Capital Rate provided in the Exhibit 8, is 8.27%. Then we calculate the Present value to find the Capital gain after refinancing for 5-year.

After calculations, we started to compare all the three alternatives for Brookline Road Shopping Center, the results will be shown later.

 

 

2.1.     Alternative 1 (Skyline Bank Loan):

For Skyline Bank Loan, we have 65% LTV with 4.375% interest rate and the 30-year Amortization period.The minimum DSCR ratio is 1.25 with  annual payments of $281,738.

Here our forecasted DSCR average ratio is 3.43 with the capital gain in Market value of Brookline Road Shopping Centre is 2.38%.

2.2.     Alternative 2 (Fourth Second Bank Loan):

For Fourth Second Bank Loan, we have 60% LTV with 3.625% interest rate and 25-year Amortization period. The minimum DSCR ratio is 1.3 with the annual payment of $264,401. Here our forecasted DSCR average ratio is 3.66 with the capital gain in market value of Brookline Road Shopping Center is 5.3%.

2.3      Alternative 3 (Regional Liberty Bank Loan):

For Regional Liberty Bank Loan, we have 70% LTV with 4.625% interest rate and 30-year Amortization Period. The minimum DSCR ratio is 1.2 with the annual payment of $312,467. Here our forecasted DSCR average ratio is 3.09 with the capital gain in Market value of Brookline Road Shopping center is -2.81%.

 

  • Recommendations:

          After the detailed qualitative and quantitative analysis, we conclude that Stanley Cirano should refinance the property (Brookline Road Shopping Center) by taking the loan from the Fourth Second Bank because it is providing the lowest interest rate 3.625% with the highest forecasted average ratio of DSCR which is 3.66. The forecasted capital gain in Market value is 5.3%, which is greater than other alternatives.

 

 

  • Columbus Festival Plaza & its Alternatives:

Columbus Festival Plaza is based on 113,572 Square foot size, located in Class B Shopping Center Elm Park. It was acquired in 2010 by Stanley Cirano through 55% debt and 45% equity. Now he is confused either to sell it or refinance it through 2 alternatives, one is to finance it by taking the loan from Oakwood Bank orthe otheris to take the loan from National Bank.

For evaluation, we took the average of three similar properties for Market Value of Columbus Festival Plaza (Excluding Fox Run Square because it possesses the high Market Value which will lead to the unacceptable high average Market value of Columbus Festival Plaza).

Property  Price
 Fox Run Square  Excluded Due to High Value
 363 N Weberr Rd                                           6,400,000
 The Landings                                           9,500,000
 Prairie Point SC                                        18,151,363
 Value of Brookline Road Shopping Center                                        11,350,454

For further analysis, we have calculated the Average Growth in Net Operating Income, Average Growth in Net Operating Cash Flow and Average Capital Cost / Net Operating Income Ratio for this property with the assumptions of the 5-year refinancing……………..

This is just a sample partical work. Please place the order on the website to get your own originally done case solution.

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