OPPapers.com

Real Estate Finance

860 LEXINGTON AVENUE – PROPOSAL

REAL ESTATE FINANCE I

THURSDAYS 5:50-7:50PM
December 15, 2005

Presented by:


Table of Contents

Executive Letter ……………………………………………………. 2

Proposed Action ……………………………………………………. 3

Static Attributes ……………………………………………………. 4

Physical Attributes ……………………………………………………. 5

Locational Attributes ……………………………………………………. 6

Comparative Evaluation ……………………………………………………. 7

Economic Base ……………………………………………………. 8

SWOT Analysis ……………………………………………………. 9

Lease Structure ……………………………………………………. 10

Investment Analysis ……………………………………………………. 11

Appendix ……………………………………………………. 13


Section 1 – Executive Letter

The purpose of this report is to present Mr. Bb Uu and Mr. Ss RR with a recommendation on their proposal to purchase the five-story building with 3 apartment units and 4 retail spaces located at 860 Lexington Avenue. Their intent is to purchase the building as is and if necessary, make only the necessary minimum maintenance and repairs to the apartment units and retail spaces, while retaining the current tenants.

Mr. Uu and Mr. RR are relative newcomers to the real estate investment market. They are seeking to form a partnership to eventually acquire a substantial income producing portfolio. 860 Lexington Avenue is the first property that would be potentially part of their portfolio. They are looking to acquire the property for tax shelter, equity and investment income purposes and are seeking a minimum of after tax yearly returns of 6.0%. The investors are taking a passive role with this property, outsourcing a management company to oversee the maintenance of the building.

In providing a recommendation, a multi-step analysis of the property and its attributes was performed. The process included an overview of the building's static, physical, and locational attributes. A comparative analysis of its attributes was then made to similar properties within a 10-mile radius. Current...