Executive Summary
Test One
Catoctin Circle
Net Operating Income
$1,053,564
Direct Cap Value
$0
@ 0.00% Cap
DCF Value
$17,559,400
@ 6.00% Exit Cap
Unlevered IRR
5.78%
Equity Multiple
1.30x
Operating Statement
Test One
Income
| Gross Potential Rent | $1,305,000 |
| Less: Vacancy (5.0%) | ($65,250) |
| Less: Credit Loss (1.0%) | ($13,050) |
| Plus: Other Income | $0 |
| Effective Gross Income | $1,226,700 |
Operating Expenses
| Real Estate Taxes | $35,000 |
| Insurance | $40,000 |
| Utilities (2.0% of EGI) | $24,534 |
| Repairs & Maintenance (3.0% of EGI) | $36,801 |
| Management Fee (3.0%) | $36,801 |
| Total Expenses | $173,136 |
Net Operating Income
| Effective Gross Income | $1,226,700 |
| Less: Total Operating Expenses | ($173,136) |
| Net Operating Income (NOI) | $1,053,564 |
Capital Costs
| Tenant Improvements (TI) ($5.00/SF) | $250,000 |
| Leasing Commissions (LC) | $2 |
| Capital Expenditures (CapEx) | $85,000 |
| Total Capital Costs | $335,002 |
Valuation Analysis
Test One
Direct Capitalization Approach
| Year 1 NOI | $1,053,564 |
| Going-In Cap Rate | 0.00% |
| Indicated Value | $0 |
Discounted Cash Flow Approach
| Hold Period | 5 years |
| Exit Year NOI | $1,163,220 |
| Exit Cap Rate | 6.00% |
| Reversion Value | $19,386,996 |
| Less: Sales Costs (2.0%) | ($387,740) |
| Net Sale Proceeds | $18,999,257 |
| DCF Implied Value | $17,559,400 |
Investment Returns
| Initial Investment (Based on DCF Value) | $17,559,400 |
| Unlevered IRR | 5.78% |
| Unlevered Equity Multiple | 1.30x |
Debt Analysis
Test One
No debt financing included in this analysis.
Assumptions
Test One
Property Information
| Property Name | Catoctin |
| Address | Catoctin Circle |
| Asset Type | office |
| Gross Area | 50,000 SF |
| Year Built | 1996 |
Operating Assumptions
| Vacancy Rate | 5.0% |
| Credit Loss | 1.0% |
| Management Fee | 3.0% |
Valuation Assumptions
| Going-In Cap Rate | 0.00% |
| Exit Cap Rate | 6.00% |
| Sales Costs | 2.0% |
| Hold Period | 5 years |
| Discount Rate | 8.0% |
| NOI Growth Rate | 2.0% |
Cash Flow Projection
Test One
Annual Cash Flows
| Year | NOI | Capital Costs | Debt Service | Cash Flow (Before Debt) | Cash Flow (After Debt) |
|---|---|---|---|---|---|
| 1 | $1,053,564 | ($335,002) | $0 | $718,562 | $718,562 |
| 2 | $1,074,635 | ($335,002) | $0 | $739,633 | $739,633 |
| 3 | $1,096,128 | ($335,002) | $0 | $761,126 | $761,126 |
| 4 | $1,118,051 | ($335,002) | $0 | $783,049 | $783,049 |
| 5 | $1,140,412 | ($335,002) | $0 | $805,410 | $805,410 |
Rent Roll
Test One
Tenant Schedule
| Tenant | Area (SF) | Rent/SF | Annual Rent | Lease End |
|---|---|---|---|---|
| BIG Tenant | 45,000 | $29.00 | $1,305,000 | 2030-10-02 |
| Total | 45,000 | — | $1,305,000 |
This analysis is for informational purposes only and does not constitute a certified appraisal or investment advice.