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13 Questions 34 35 Note the significant difference between this NOI and the Offering Memorandum NOI (which is the actual NOI). What does this tell us about current rents versus market rents? Why is there such a diconnect? 36 37 Is there an opportunity to add value? 38 Why is there such a difference between the different values? What does this tell us about the asset? 39 INPUTS 2-41 Property Rights Property Boundary acres) Building Boundary of or units)- Gross Leasable Area 5-61 Revenue Annual Rent Vacancy Rate Growth Rate 21-22 Expenses Operating Expenses Reserve for Capital Expenditures (% of PGI) Growth Rate Selling Expenses 9-15 | Debt Service Loan-to-Value (LTV) Interest Rate Tem 20 Taxes Building Assessed Value (Palass 36) Ordinary Tax Rate Recapture Tax Rate Capital Gain Tax Rate Table 1. Value Year 1 Not Potential Gross Income (PG) less Vacancy (VCL) (number not %) Effective Gross Income (G) less Operating Expenses (OE) (number not %) less Reserve for Capital Expenditures (Capl)-5% PGI Net Operating Income (NO) Stabilized Value (NOVCap Rate) Table 3. Net Operating income Potential Gross Income From Table 1) less Vacancy Effective Gross income less Operating Expenses less Reserve for Capital Expenditures (Cap)5% PG Net Operating Income Year O 13.6 $14.64 5.2% 3.0% $4.17 5% 3.0% 6.0% 70% 4.0% 30 $6,110,500 28.0% 25.0% 15.0% $2,160,073 ($112,324) $2,047,750 d615,267) $108,004) $1,324,479 $17.778,243 Year 1 $2,360,073 ($112,324) $2,047,750 ($615,267) 108,004) $1.324.479 147,546 Year 2 $2,224,876 ($115,694) $2,109,182 (5633,725) ($111,244) $1,364,214 OUTPUTS 7-8 Comparative Value Listing Price Assessed Value Stabilized Value Comparative Value (from Comp Valuation) 16-19 Rates and Returns Going-in Cap Rate Exit Cap Rate Discount Rate This Table for Assignment 3 Year 3 $2,291,622 119.164) $2,172,458 (633,725) $114581) $1424352 Year 4 $2,300.371 122.739) 12.337431 (1633.725) Year S $2,431, 182 124,425) 12.304760 (635,725) 14121.559 $1.548.476 $8.150.000 $12,115,300 $17,778,243 $10,291,597 7,5% 7.0% 10.0% $130,214) 12.378,305 3433, 223) ($125.206) $1,614,972 13 Questions 34 35 Note the significant difference between this NOI and the Offering Memorandum NOI (which is the actual NOI). What does this tell us about current rents versus market rents? Why is there such a diconnect? 36 37 Is there an opportunity to add value? 38 Why is there such a difference between the different values? What does this tell us about the asset? 39 INPUTS 2-41 Property Rights Property Boundary acres) Building Boundary of or units)- Gross Leasable Area 5-61 Revenue Annual Rent Vacancy Rate Growth Rate 21-22 Expenses Operating Expenses Reserve for Capital Expenditures (% of PGI) Growth Rate Selling Expenses 9-15 | Debt Service Loan-to-Value (LTV) Interest Rate Tem 20 Taxes Building Assessed Value (Palass 36) Ordinary Tax Rate Recapture Tax Rate Capital Gain Tax Rate Table 1. Value Year 1 Not Potential Gross Income (PG) less Vacancy (VCL) (number not %) Effective Gross Income (G) less Operating Expenses (OE) (number not %) less Reserve for Capital Expenditures (Capl)-5% PGI Net Operating Income (NO) Stabilized Value (NOVCap Rate) Table 3. Net Operating income Potential Gross Income From Table 1) less Vacancy Effective Gross income less Operating Expenses less Reserve for Capital Expenditures (Cap)5% PG Net Operating Income Year O 13.6 $14.64 5.2% 3.0% $4.17 5% 3.0% 6.0% 70% 4.0% 30 $6,110,500 28.0% 25.0% 15.0% $2,160,073 ($112,324) $2,047,750 d615,267) $108,004) $1,324,479 $17.778,243 Year 1 $2,360,073 ($112,324) $2,047,750 ($615,267) 108,004) $1.324.479 147,546 Year 2 $2,224,876 ($115,694) $2,109,182 (5633,725) ($111,244) $1,364,214 OUTPUTS 7-8 Comparative Value Listing Price Assessed Value Stabilized Value Comparative Value (from Comp Valuation) 16-19 Rates and Returns Going-in Cap Rate Exit Cap Rate Discount Rate This Table for Assignment 3 Year 3 $2,291,622 119.164) $2,172,458 (633,725) $114581) $1424352 Year 4 $2,300.371 122.739) 12.337431 (1633.725) Year S $2,431, 182 124,425) 12.304760 (635,725) 14121.559 $1.548.476 $8.150.000 $12,115,300 $17,778,243 $10,291,597 7,5% 7.0% 10.0% $130,214) 12.378,305 3433, 223) ($125.206) $1,614,972

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