Apartment Building• Requires land + construction

Class A Office Building• Requires purchase of existing building

Retail Building• Requires purchase of existing building

Description of Properties

Apartment Building Property

Class-A Office Building Property

Retail Building Property

Conclusions

• The Class-A office building property would be the preferred investment project since:– The rent required to meet financial obligations with the loan is approx. 17% lower than

the current market rate making this project a feasible investment.– In addition, the NPV is the highest of the three projects evaluated at approx. $221,000.

• According to the SFFA analysis the only property that would not be a feasible investment project is the apartment building – The required rent to meet the financial obligations, according to the current loan terms,

is higher than the current market rate, therefore, making this project – The NPV is showing positive assuming the rent at market rate. However, we know that

at this rate we would not be able to meet loan obligations.• The retail building was also an attractive and feasible investment project because:

– The required rent to meet loan obligations is lower than the market rate by close to 14%; and

– The NPV is $176,000.