Construct an income proforma operating statement

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Reference no: EM133040361

Construct an income proforma operating statement using the following information. Show the following:

    • PGI (rental income and other income itemized), shown in whole dollars and $/SF
    • Vacancy & collection loss, shown in whole dollars and as a percentage
    • EGI, shown in whole dollars and $/SF 
    • Operating expenses, shown in whole dollars and $/SF
    • OER, shown as a percentage
    • NOI, shown in whole dollars and $/SF

Subject: 312,000 SF warehouse

Income:

  • Market rent is $7.25/SF with industrial gross terms. Industrial gross in this market means the landlord pays for taxes, insurance, common area maintenance (CAM), management, and replacement reserves.
  • The property receives other income from leasing trailer parking spaces. They currently lease 40 spaces for $80/month.

Vacancy and collection loss:

  • Market vacancy in this market is 2.5%. Market collection loss is 0.25%.

Operating expenses:

  • Insurance: $0.12/SF
  • Real estate taxes: $2.20/SF
  • CAM: $0.25/SF
  • Management fee: 4% of EGI
  • Replacement reserves: Based on a sinking fund factor for $3.50/SF for 4 years in an interest-bearing account with a rate of 3% (annual compounding).

Reference no: EM133040361

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