Calculate terminal value and current equity

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Reference no: EM132768558

Mr Student has owned a mini storage for 5years There is a mortgage for $ 3,000,000.00

Year 1, NOI is $ 400,000.00 is growing 2% per year.

The current cap rate for this type of investment is 8% and going -out cap rate is higher by 0.5% to reflect the risk associated with passage of time.

Cost of SALE

Problem 1: Calculate

a) Current value?

B) Current Equity?

C) Terminal Value?

Problem 2: Assuming the above question new going - out Cap Rate is 7.75%

what is the

a) Current value?

B) Current Equity?

C) Terminal Value?

be now with the new

Reference no: EM132768558

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