Based on the Following Information, Develop a Front Door "Simple

Essay

Based on the following information, develop a front door "Simple Financial Feasibility Analysis" SFFA) for this project estimating the required minimum market gross rent per SF that will support development.
• 40,000 NRSF office building project.
• Acquisition & construction cost = $1,500,000;
• Estimated operating costs to landlord) = $100,000/yr.
• Projected stabilized occupancy = 95%.
• Permanent loan available on completion @ 9% interest-only loan) with 130% debt service coverage requirement on the net operating income, and 75% maximum loan-to-value ratio.
1500000 X .75 = 1125000 Max loan
1125000 X .09 = 101250/yr debt svc
101250 X 1.3 = 131625 Required NOI
131625 + 100000 = 231625 Required EGI
231625 / .95 = 243816 Required PGI
243816 / 40000 = $6.10 / SF Gross rent required.