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6. Consider the following zoning parameters in respect of a developable land which you have...

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Accounting

6. Consider the following zoning parameters in respect of a developable land which you have been asked to analyze: Lot Area 45,000 square feet Floor Area Ratio 0.9 Maximum building coverage ratio 40% Maximum number of stories 3 Zoning Classification C-2 (General Commercial) Suppose you are considering developing it to a medical office building which is consistent with the classification. Preliminary studies suggest the following. Development and market parameters: Construction cost per square foot of GBA $160.00 Land value per square foot $ 50.00 Building efficiency 90% Rent per square foot of GLA(3yr/5yr leases) $ 30.00 Operating expense per square foot (of GLA) $ 8.50 (Gross lease with expense stop at $6.50) Vacancy and collection losses for year 1 15% a. Determine the gross building area (GBA) and implied gross leasable area (GLA). [Hint: you must consider both the bulk and height restrictions.) [4 points] b. What would be the total development cost (project budget)? [5 points] c. Construct 1st year pro forma operating income statement to the level of the Net Operating income (NOI) realizable form the project under the market parameters stipulated above. Assume a zero capital expenditure. [12 points]

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