Start Excel. Download and open the

file named Excel_Project.

In

the NOI sheet, calculate the Total Rentable

Square Feet (RSF) by Unit Type in range F3:F7 by multiplying the number of

units for each type by the square footage of each unit type. Then calculate

the Total rentable square footage of the building in cell F8.

In

cell I4, enter a formula that calculates the annual insurance expense for

Year 1. As the building owner, you obtain insurance at a rate of $400 per

residential unit. Commercial units pay their own insurance. So you only pay

insurance on the residential units.

In

cell I5, enter a formula to calculate the Repairs & Maintenance expense

estimate for Year 1. You assume that each month,

there will be a repair expense of $120 for half of the residential units.

Commercial units pay for their own repairs and maintenance.

In

cell I6, enter a formula to calculate the annual Utilities expense estimate

for Year 1. All tenants will pay their own utilities. But you, the owner,

will pay $0.40 per square foot per month for the 1200 square feet of common

area space (E13) of the building (lobby, hallways, elevator, gym, etc.).

In

cell I9, enter a formula to calculate the annual Janitorial Cleaning expense

estimate for Year 1. A cleaning company can clean the 1200 SF common area

twice per week at a rate of $150 per day. Enter the annual cleaning expense,

assuming 52 weeks in a year.

In

cell I10, enter a formula to calculate the annual property Management fee.

Management companies charge 5

% of rental income. (Use monthly rent estimates

in range C3:C7 and the number of units per type in range D3:D7 to determine

annual rental income.)

In

cell I12, enter a formula to calculate the annual doorman security expense

estimate for Year 1. You will employ 2

doormen. Each one spends an 8 hour shift each day, 6 days per week. Assume 52

weeks per year and $12/hour wage for each doorman.

In cell I13, enter a formula to

calculate the Brokerage Fee to find tenants for all of the residential units.

Realtors charge the equivalent of one month of rent for each unit leased.

In cell I14, enter a formula to

calculate the Brokerage Fee to find tenants for all of the commercial units. Each

commercial lease is negotiated for a 5-year term of fixed rent. So the

brokerage fee for each unit is an upfront charge of 5

% of the total rent for

the entire 5-year lease period.

In

cell I15, enter a formula to calculate the Capital Reserves estimate for Year

1. Capital Reserves are savings put aside in case there is a large unforeseen

repair or expense incurred. You estimate a capital reserve of $0.50 cents per

RSF of the building.

In

cell E19, enter a VLookup function to calculate the annual base rent for the first unit based on Unit Type. Use the Year

1 Rental Assumptions table in your formula and make sure to calculate annual rent. Copy your formula down

the column to cell E42.

You

assume that Residential Rent will increase by 2

% each year (see cell E11).

For each residential unit, calculate annual rent estimates for Years 2 to 10

by applying the Residential Rent Increase to the previous year’s rent.

Base

rents for the commercial unit leases are fixed for 5 years. And you assume a

Year 6 rent increase (see cell E12) that will be fixed for Years 6 through 10

as well. For each commercial unit, enter the annual rent for Years 2 to 10, taking

into account that in the 6th Year, there will be a new increased

rent that is fixed for the remaining 5 years.

Calculate

Total Base Rent for each year in row 43. Apply Bold font to this row and

format the values as Currency format with no decimals.

You negotiate a percentage rent

component of the lease with the Large

Commercial tenant in Unit G1. The Percentage Rent clause says that the

tenant will pay you 2

% of their gross sales, not to exceed $12,000

in percentage rent. The Large Commercial tenant has given you their sales

projections for the next 10 years (row 79). Enter an IF function in cells E45:N45

that calculates the percentage rent based on the tenant’s

sales projection for that Year.

Calculate

Potential Gross Rent for each year in row 46 by adding Percentage Rent to

Total Base Rent. Apply Bold font to this row and format the values as

Currency format with no decimals.

You

can expect a certain amount of vacancy and uncollected rent each year, which

is accounted for in the Vacancy and Collection Loss estimate (cell E14). Calculate

Vacancy and Collection Loss estimate by multiplying the loss factor to the Potential

Gross Rent for each year in row 48.

Subtract

Vacancy & Collection Loss from Potential Gross Rent to determine

Effective Gross Rent for each year in row 49. Apply Bold font to this row and

format the values as Currency format with no decimals.

In cell E54, enter an HLookup formula

based on the Year to determine the real estate tax rate using the table in

the Taxcast sheet. (Do not enter the hardcoded tax rate.)

You multiply the real estate tax rate

per square foot (found by the HLookup) to the residential square footage. The

commercial units will pay their own share of taxes. Copy your formula to

Years 2 to 10.

Hint: See Tax Expense formula in cells

I3 and J3.

Set cell E55 equal to the Year

Insurance expense in the Operating Expense Assumptions table at the top of

the sheet. Copy the formula down to cell E60. For each of the expenses in

rows 55 to 60, calculate Year 2 to Year 10 expenses using their respective

annual percentage increases displayed in column B.

Management Fees are calculated as a

percentage of Total Base Rent. In row 61, enter a formula to calculate the

Management Fee for each year using the annual percentage fee displayed in

column B.

You negotiate a maintenance contract

with the elevator manufacturer for a fixed cost of $900 per year for 10

years. Set cell E62 equal to the appropriate cell in the Operating Expense

Assumptions table. Enter a formula in cells F62:N62 to display the annual

Elevator Maintenance cost for each year.

Set cell E63 equal to the appropriate

cell in the 2020 Operating Expense Assumptions table. Enter a formula in

cells F63:N63 to display the annual Security expense using the annual

percentage increase displayed in column B.

Set cell E64 equal to the appropriate

cell in the Operating Expense Assumptions table.

Assume you’ll

pay a brokerage fee to either rent out or renew all of the residential units every

2 years. The brokerage fee for each unit will be 1-month of that year’s

rental rate.

Enter a formula every two years

starting in Year 3 to calculate the Brokerage Fee for Residential units.

Set cell E65 equal to the appropriate

cell in the Operating Expense Assumptions table.

Assume you’ll

pay a brokerage fee to re-rent or renew each commercial unit every 5 years.

The brokerage fee for each unit will be a percentage of the total rent over

the entire 5 year lease period.

Enter a formula to calculate the

Brokerage Fee for Commercial units. Hint: Commercial unit brokerage fees will

only be paid out in Year 1 and Year 6.

Set cell E66 equal to the appropriate

cell in the Operating Expense Assumptions table. Enter a formula in cells

F66:N66 to display the annual Capital Reserves using the annual percentage

increase displayed in column B.

Calculate Total Expenses for each

year in row 67. Then calculate Net Operating Income for each year in row 69.

Net Operating Income is calculated as Effective Gross Rent less Total

Expenses. Apply Bold font and format the values as Currency format with no

decimals for both rows.

Select the 2020 Expense Assumptions

in array H3:I15 and make a pie chart. Move it to its own sheet named Expense Chart.

Apply Chart Style 7 to the pie chart. Change the Chart Title to Expense Comparison. Position the

Legend on the righthand side.

Using the Data Labels task pane,

remove the Values and display the Percentages and Categories. Close the task

pane. Position the data labels as Data Callout.

Change the Legend Font to Times New

Roman size 8. Change the Data Labels to Times New Roman size 6.

Place the Expense Chart sheet between the NOI sheet and the Taxcast

sheet.

For Extra Credit, calculate the Cash

Flow After Debt Service. Assume you can purchase this building for $6.1

million. Calculate the Down Payment, Loan Amount, Monthly Debt Payment and

Annual Debt Payment based on the information given in the Mortgage Finance

table in the NOI sheet.

In row 72, enter the total annual

debt service for each year. In row 73, calculate the Cash Flow After Debt

Service for each year. Apply Bold font and format the values as Currency

format with no decimals for both rows.

Save the workbook under FirstNameLastName_ExcelProject.

Close the workbook and then exit Excel. Submit the workbook as directed.