CHAPTER IV - DATA ANALYSIS AND INTERPRETATION

PROPERTY #1

Name : Altamont Avenue

Type : Retail
Net Rentable Area : 60,802 SF
Value : $ 10,197,191

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Table 5.1

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CASH FLOWS
For the Years Ending Jun-2006 Jun-2007 Jun-2008 Jun-2009 Jun-2010 Jun-2011 Jun-2012 Jun-2013 Jun-2014 Jun-2015
POTENTIAL GROSS REVENUE
Base Rental Revenue $2,510,850 $2,530,635 $2,861,522 $2,892,956 $2,910,410 $2,987,657 $3,142,125 $3,351,311 $3,437,967 $3,457,407
Absorption & Turnover Vacancy (220,401) (209,279) (212,557) (83,682) (204,442) (133,475) (408,005) (11,179) (97,010)
Base Rent Abatements (177,497) (134,303) (398,422) (40,065) (111,575) (113,540) (229,050) (389,958) (149,194) (32,337)
Scheduled Base Rental Revenue $2,112,952 $2,187,053 $2,250,543 $2,852,891 $2,715,153 $2,669,675 $2,779,600 $2,553,348 $3,277,594 $3,328,060
Porters' Wage Revenue 11,484 7,778 7,679 7,238 3,304 0 0 0 0 0
Expense Reimbursement Revenue 14,182 12,609 8,437 3,644 1,715 0 0 0 0 0
TOTAL POTENTIAL GROSS REVENUE $2,138,618 $2,207,440 $2,266,659 $2,863,773 $2,720,172 $2,669,675 $2,779,600 $2,553,348 $3,277,594 $3,328,060
EFFECTIVE GROSS REVENUE $2,138,618 $2,207,440 $2,266,659 $2,863,773 $2,720,172 $2,669,675 $2,779,600 $2,553,348 $3,277,594 $3,328,060

OPERATING EXPENSES
Real Estate Taxes $412,124 $424,488 $437,222 $450,339 $463,849 $477,765 $492,098 $506,861 $522,066 $537,728
Advertising 6,906 7,113 7,327 7,546 7,773 8,006 8,246 8,494 8,748 9,011
Insurance 69,729 71,821 73,975 76,195 78,481 80,835 83,260 85,758 88,331 90,981
Repairs 169,493 174,578 179,815 185,210 190,766 196,489 202,384 208,455 214,709 221,150
Payroll Expenses 303,274 312,372 321,743 331,396 341,338 351,578 362,125 372,989 384,178 395,704
Utilities 80,695 83,116 85,609 88,178 90,823 93,548 96,354 99,245 102,222 105,289
Management Fees 18,241 18,788 19,351 19,932 20,530 21,146 21,780 22,434 23,107 23,800
Miscellaneous Expense 58,023 59,764 61,557 63,403 65,305 67,265 69,282 71,361 73,502 75,707
Administrative & Consulting 337,912 348,049 358,491 369,246 380,323 391,733 403,485 415,589 428,057 440,899
TOTAL OPERATING EXPENSES $1,456,397 $1,500,089 $1,545,090 $1,591,445 $1,639,188 $1,688,365 $1,739,014 $1,791,186 $1,844,920 $1,900,269

NET OPERATING INCOME $682,221 $707,351 $721,569 $1,272,328 $1,080,984 $981,310 $1,040,586 $762,162 $1,432,674 $1,427,791

LEASING & CAPITAL COSTS

Tenant Improvements $372,750 $141,993 $268,757 $0 $0 $326,592 $183,617 $317,848 $35,470 $0
Leasing Commissions 117,186 45,777 184,254 0 43,581 82,433 91,180 169,897 58,630 50,523
Capital Reserve 12,160 12,525 12,901 13,288 13,687 14,097 14,520 14,956 15,404 15,867

TOTAL LEASING & CAPITAL COSTS $502,096 $200,295 $465,912 $13,288 $57,268 $423,122 $289,317 $502,701 $109,504 $66,390

CASH FLOW BEFORE DEBT SERVICE $180,125 $507,056 $255,657 $1,259,040 $1,023,716 $558,188 $751,269 $259,461 $1,323,170 $1,361,401
& TAXES

Table 5.2 Terminal Value Calculation

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Terminal Value Calculation
Valuation Term 10 Years
Year 11 NOI $1,248,948
Terminal Cap Rate 8.00%
Gross Sale Proceeds $15,611,850
Net Sale Proceeds $15,611,850

Table 5.3 Present Value Summary

Present Value Summary
Total PSF %
PV of Residual @ 10.0% $6,019,044 $98.99 59.0%
PV of Cash Flow @ 10.0% 4,178,147 68.72 41.0%
Total Present Value $10,197,000 $167.71 100.0%

Interpretation:
Here we have assumed a 10 year holding period irrespective of the useful life of the asset. At the end of the 10 th year, the
property is assumed to be sold. So, the 11th year NOI is capitalized to get the Net Sale Proceeds. The capitalized value is
then discounted to get the present value. This value is added to the present value of the 10 year cash flows to get the
value of the property.

Table 5.4 NPV Sensitivity Table

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 Discount Rate
9.50% 9.75% 10.00% 10.25% 10.50%
7.50% $11,009 $10,801 $10,598 $10,400 $10,206
(181.06) (177.65) (174.31) (171.05) (167.86)
Terminal Cap Rate
7.75% $10,792 $10,590 $10,391 $10,198 $10,009
(177.50) (174.16) (170.90) (167.72) (164.61)
8.00% $10,589 $10,391 $10,197 $10,008 $9,823
(174.16) (170.90) (167.71) (164.60) (161.56)
8.25% $10,398 $10,204 $10,015 $9,830 $9,649
(171.02) (167.83) (164.71) (161.67) (158.69)
8.50% $10,219 $10,029 $9,843 $9,662 $9,485
(168.06) (164.94) (161.89) (158.91) (155.99)

Interpretation:
The above table shows the resulting Net Present Value of the property in response to the fluctuations in Cap rate and
Discount rate due to changes in market conditions.

Table 5.5 Sensitivity Of DSCR And LTV To Changes In Interest Rates And Cap Rates

Debt Service Coverage Matrix Loan To Value Matrix

Interest Rate Debt Service DSCR Direct Cap. Rate Value LTV
5.75% $566,196 1.20 7.00% $9,746,000 82.1%
6.25% $593,702 1.15 7.50% $9,096,000 88.0%
6.75% $621,820 1.10 8.00% $8,528,000 93.8%
7.25% $650,526 1.05 8.50% $8,026,000 99.7%
7.75% $679,796 1.00 9.00% $7,580,000 105.5%

The above tables show the corresponding changes in Debt Service Coverage Ratio to the changing Interest rates and the
changes in the Loan To Value corresponding changes in Cap Rates. Clients generally require this table for their decision
making.

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Table 5.6 Lease Expiration

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For the Years Ending Jun-2006 Jun-2007 Jun-2008 Jun-2009Jun-2010Jun-2011 Jun-2012 Jun-2013 Jun-2014Jun-2015
TENANT SUITE
MADISON LINEN 401 480
HEBRON YESHIVA 406 536
MERCHANT RENAISSANCE 503 712
BUREKHOVICH TRAVEL 504 1,575
INNO FUND CORP. 505 1,100
SALOMON ENGINEERING 803 1,125
GLAMOUR (USA), INC. 407 776
SAMUEL SANG HYON 502 2,081
SENECA TRADING, INC. 610 752
PRIMARY RESOURCE 901 2,000
KAM CONSULTING SERVICE 410 650
WELLINK PRODUCTS 603 1,210
BEST STYLES, INC. 0604A 2,145
URBAN OUTDOOR 701 400
MARKETING GRAPHICS, INC 707 636
C & M INTERNATIONAL 708 600
J & J CORP. 201 1,215
BEST SILVER, INC. 0205A 4,130
TIME CENTER, INC. STOR3 315
J & J CORP. STOR5 682
KI KI JEWELRY CORP 605 1,000
WENCY LLC 408 1,460
HERITAGE, INC. 810 1,275
HOWARD NOWES 405 640
K. YOUNG ASSESSARIES 508 1,800
AFRICAN ANGELS STOR4 445
STATE TO STATE RISK 802 553
CIRCLEX CORPORATION 601 1,782
BEST STYLES, INC. 0610A 460
EMPORIO PLUS, INC. 0703A 365
SECURE TRADING EST. 801 410
VERMANI PERFUMES STOR7
BEST STYLES INC. 400 1,800
AA & TC, INC. 706 1,400
HIND FASHION, INC. 800 1,037
EARTH MECHANICAL CORP 806 1,044
UNICOM CRAFTS, INC. 809 1,063
GENESIS INTERNATIONAL STOR2 689
LUCKY SILVER INC. 404 1,000
LUCKY GEM, INC. 300 630
LUCKY GEM, INC. 301 1,295
ABLE JEWELRY CREATION 305 530
LUCKY GEM, INC. 308 5,107
TOP SALE TRADE USA 807 1,700
HAN SOL USA GROUP, INC. 704 600
BARATO TRADING STOR6 1,000
SILVER GALORE, INC. STOR8 881
GURU IMPORTS, INC. 202 625
DECENT TRADING, INC. STOR1 2,000
TOTAL 30,337 23,842 4,506 0 0 0 0 0 0 0
% of Total SF Expiring 49.89% 39.21% 7.41% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Culmulative Expiration 49.89% 89.1% 96.5% 96.5% 96.5% 96.5% 96.5% 96.5% 96.5% 96.5%

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Fig 5.1 Lease Expiration Chart

Year % of NRA Expiring

% of NRAAnnually
Expiring Cumulative
Jun-2006 2006 2006 49.9% 49.9%
Jun-2007 2007 2007 39.2% 89.1%
Jun-2008 2008 2008 7.4% 96.5%
Jun-2009 2009 2009 0.0% 96.5%
Jun-2010 2010 2010 0.0% 96.5%
Jun-2011 2011 2011 0.0% 96.5%
Jun-2012 2012 2012 0.0% 96.5%
Jun-2013 2013 2013 0.0% 96.5%
Jun-2014 2014 2014 0.0% 96.5%
Jun-2015 2015 2015 0.0% 96.5%

Interpretation
The above chart depicts the percentage of Net Rentable Area completing the first lease
rollover. Table 6 shows the total square foot of first rollover of each tenant.
The information was obtained from the lease agreements. Whenever there is a lease
rollover, there is a probability of either the tenant renewing the lease or vacating. This risk is
shown above. Here 96.5 % gets rolled over within 3 years, hence the risk is high.

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Table 5.7 Rent Roll
Tenant Suite No. SF % of Total Rent/SF Annual % of Annual
SF Incom e Income
Credit Tenants
J & J CORP. STOR5 682 1.1% $138.56 $94,501 4.5%
J & J CORP. 0201 1,215 2.0% $13.00 $15,790 0.7%
Credit Tenants Total/Average 1,897 3.1% $58.14 $110,291 5.2%

Non-Credit Tenants
DECENT TRADING, INC. STOR1 1,487 2.4% $196.98 $292,903 13.9%
GENESIS INTERNATIONAL STOR2 1,000 1.6% 156.60 156,600 7.4%
TIME CENTER, INC. STOR3 315 0.5% 197.78 62,300 2.9%
AFRICAN ANGELS STOR4 445 0.7% 321.35 143,002 6.8%
BARATO TRADING STOR6 881 1.4% 194.10 170,998 8.1%
VERMANI PERFUMES STOR7 1,800 3.0% 53.17 95,706 4.5%
SILVER GALORE, INC. STOR8 625 1.0% 115.20 72,000 3.4%
GURU IMPORTS, INC. 0202 2,000 3.3% 24.90 49,800 2.4%
BEST SILVER, INC. 0205A 4,130 6.8% 11.14 45,998 2.2%
LUCKY GEM, INC. 0300 1,295 2.1% 24.68 31,961 1.5%
LUCKY GEM, INC. 0301 530 0.9% 24.68 13,080 0.6%
ABLE JEWELRY CREATION 0305 5,107 8.4% 24.08 122,977 5.8%
LUCKY GEM, INC. 0308 1,700 2.8% 24.68 41,956 2.0%
BEST STYLES INC. 0400 1,400 2.3% 24.86 34,804 1.6%
MADISON LINEN 0401 480 0.8% 12.71 6,100 0.3%
GLAMOUR LINE INC. 0402 500 0.8% 25.20 12,600 0.6%
DYNAMIC AIRCONDITIONING 0403 400 0.7% 29.63 11,850 0.6%
LUCKY SILVER INC. 0404 630 1.0% 28.57 17,999 0.9%
HOWARD NOWES 0405 640 1.1% 23.46 15,013 0.7%
HEBRON YESHIVA 0406 536 0.9% 11.63 6,231 0.3%
GLAMOUR (USA), INC. 0407 776 1.3% 12.23 9,490 0.4%
WENCY LLC 0408 1,460 2.4% 18.08 26,397 1.2%
KAM CONSULTING SERVICE 0410 650 1.1% 11.51 7,479 0.4%
SAMUEL SANG HYON 0502 2,081 3.4% 12.58 26,186 1.2%
MERCHANT RENAISSANCE 0503 712 1.2% 12.80 9,114 0.4%
BUREKHOVICH TRAVEL 0504 1,575 2.6% 12.42 19,555 0.9%
INNO FUND CORP. 0505 1,100 1.8% 13.02 14,317 0.7%
K. YOUNG ASSESSARIES 0508 1,800 3.0% 19.86 35,756 1.7%
CIRCLEX CORPORATION 0601 1,782 2.9% 25.59 45,595 2.2%
WELLINK PRODUCTS 0603 1,210 2.0% 14.91 18,045 0.9%
BEST STYLES, INC. 0604A 2,145 3.5% 11.67 25,032 1.2%
KI KI JEWELRY CORP 0605 1,000 1.6% 13.65 13,650 0.6%
SENECA TRADING, INC. 0610 752 1.2% 12.65 9,510 0.5%
BEST STYLES, INC. 0610A 460 0.8% 27.18 12,502 0.6%

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P.O.M. PLANNING SERVICE 0700 1,042 1.7% 19.58 20,402 1.0%
URBAN OUTDOOR 0701 400 0.7% 13.08 5,233 0.2%
METRO OFFICE FURNITURE 0702 630 1.0% 20.95 13,199 0.6%
EMPORIO PLUS, INC. 0703A 365 0.6% 29.59 10,800 0.5%
HAN SOL USA GROUP, INC. 0704 1,000 1.6% 28.60 28,600 1.4%
AA & TC, INC. 0706 1,037 1.7% 26.04 27,003 1.3%
MARKETING GRAPHICS, INC 0707 636 1.0% 12.92 8,215 0.4%
C & M INTERNATIONAL 0708 600 1.0% 12.92 7,750 0.4%
HIND FASHION, INC. 0800 1,044 1.7% 23.18 24,202 1.1%
SECURE TRADING EST. 0801 410 0.7% 26.95 11,049 0.5%
1220 BROADWAY BUSINESS 0801A 1,032 1.7% 27.91 28,803 1.4%
STATE TO STATE RISK 0802 553 0.9% 25.50 14,102 0.7%
SALOMON ENGINEERING 0803 1,125 1.9% 13.01 14,637 0.7%
EARTH MECHANICAL CORP 0806 1,063 1.7% 29.54 31,399 1.5%
TOP SALE TRADE USA 0807 600 1.0% 23.00 13,800 0.7%
UNICOM CRAFTS, INC. 0809 689 1.1% 26.27 18,098 0.9%
HERITAGE, INC. 0810 1,275 2.1% 22.74 28,996 1.4%
PRIMARY RESOURCE 0901 2,000 3.3% 9.93 19,867 0.9%
Non-Credit Total/Average 58,905 96.9% $34.00 $2,002,661 94.8%

Total/Average 60,802 100.0% $34.75 $2,112,952 100.0%

Interpretation:
The above table shows whether the tenants are credit tenants or not. This information was
searched from websites such as Standard & Poors, Moodys and Fitch to find out the credit
rating of each tenant. Then they are rated as credit and non-credit based on the credit rating
table. A credit tenant generally is an anchor tenant who attracts customers to the property.
His lease lasts long and he is a credit worthy tenant. The area occupied by the tenant and
the income generated by them is also shown in the table.

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