NNN Leases Great Location 100% Occupied National Credit Tenant Great Cash Flow Ideal For 1031 Senior Investment Associate avonromer@ccim.net BK575531 Mario Abati Commercial & Investment Specialist 954-816-9836 Mario@fitzgeraldgroup.com 1800 Eller Drive, Suite 222 Fort Lauderdale, FL 33316 (p) 954-760-9310 (f) www.fitzgeraldgroup.com
Table of Contents Real Estate Investment Details... 3 Property Description... 4 Property Photos... 5 Maps and Aerials... 6 Executive Summary... 7 Internal Rate of Return Analysis... 8 Cash Flow Analysis... 9 Cash In Cash Out... 10 Detailed General Expenses... 12 Financial Indicators... 13 Loan Analysis... 14 Cumulative Analysis... 14 Sales Comparables... 15 Equity vs. Debt... 18 Cumulative Wealth Analysis... 19 Gross Income Vs. Operating Expenses... 20
Real Estate Investment Details ANALYSIS Analysis Date: April 2013 PROPERTY Property: Office/Warehouse NNN Property Address: Year Built: 2000 PURCHASE INFORMATION Property Type: Industrial Purchase Price: $4,000,000 Tenants: 1 Total Rentable Sq. Ft.: 23,674 Resale Expenses: 6.0% FINANCIAL INFORMATION All Cash Discount Rate: 6.00% LOANS All Cash Debt Term Amortization Rate Payment LO Costs INCOME & EXPENSES CONTACT INFORMATION Gross Operating Income: $429,576 Monthly GOI: $35,798 Total Annual Expenses: ($141,103) Monthly Expenses: ($11,759) avonromer@ccim.net BK575531 Mario Abati 954-816-9836 Mario@fitzgeraldgroup.com The calculations and data presented are deemed to be accurate, but not guaranteed. They are intended for the purpose of illustrative projections and analysis. The information provided is not intended to replace or serve as substitute for any legal, accounting, investment, real estate, tax or other professional advice, consultation or service. The user of this software should consult with a professional in the respective legal, accounting, tax or other professional area before making any decisions. page 3 of 20
Property Description Property Discription This is a 23,674 SF multi-tenant office/warehouse in beautiful Deerfield Beach Florida. Built in 2000, the subject property was constructed concrete block and stucco, 15ft ceilings, over 50 parking spaces, sprinkler system, security system and more. Property is comprised mostly comprised with class B office space with less than 1,000 SF of warehouse. Only 2 tenants occupy the entire parcel. One is a national credit tenant that leases 20,000 and has been in place since 2000. This tenant has annual contracts with 1 year options. The other tenant is a dental company currently under a 5 year term with 3% annual escalations. Both tenants are on NNN leases. The subject property is located.5 miles away from I-95 and just minutes away from other major transit routes such as I-595, Florida Turnpike, US1 and Powerline Rd. This provides ease and accessability to Palm Beach, Broward and Miami-Dade counties. page 4 of 20
Property Photos Property Photos page 5 of 20
Maps and Aerials Maps Satilite Map Local Map page 6 of 20
Executive Summary ACQUISITION COSTS Purchase Price, Points and Closing Costs $4,000,000 Investment - Cash $4,000,000 INVESTMENT INFORMATION Purchase Price $4,000,000 Price per Tenant $4,000,000 Price per Sq. Ft. $168.96 INCOME, EXPENSES & CASH FLOW Gross Scheduled Income $429,576 Total Vacancy and Credits $0 Operating Expenses ($141,103) Net Operating Income $288,473 Debt Service $0 Cash Flow Before Taxes $288,473 FINANCIAL INDICATORS Cash on Cash Return Before Taxes 7.21% Optimal Internal Rate of Return (yr 10) 7.22% Debt Coverage Ratio N/A Capitalization Rate 7.21% Gross Income / Square Feet $18.15 Gross Expenses / Square Feet ($5.96) Operating Expense Ratio 32.85% page 7 of 20
Internal Rate of Return Analysis BEFORE TAX IRR Time Future Cash Flows Initial Investment ($4,000,000) End of Year 1 $288,473 End of Year 2 $294,798 End of Year 3 $301,337 End of Year 4 $308,098 End of Year 5 $315,087 End of Year 6 $322,312 End of Year 7 $329,781 End of Year 8 $337,501 End of Year 9 $345,481 End of Year 10* $4,113,729 IRR = 7.46% * ($353,729 + $3,760,000) AFTER TAX IRR Time Future Cash Flows Initial Investment ($4,000,000) End of Year 1 $288,473 End of Year 2 $294,798 End of Year 3 $301,337 End of Year 4 $308,098 End of Year 5 $315,087 End of Year 6 $322,312 End of Year 7 $329,781 End of Year 8 $337,501 End of Year 9 $345,481 End of Year 10* $3,978,541 IRR = 7.22% * ($353,729 + $3,624,812) page 8 of 20
Cash Flow Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 GROSS SCHEDULED INCOME $429,576 $438,746 $448,191 $457,919 $467,940 $478,260 $488,891 $499,840 $511,118 $522,734 Total Operating Expenses ($141,103) ($143,948) ($146,854) ($149,822) ($152,853) ($155,948) ($159,110) ($162,339) ($165,637) ($169,005) NET OPERATING INCOME $288,473 $294,798 $301,337 $308,098 $315,087 $322,312 $329,781 $337,501 $345,481 $353,729 Loan Payment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET CASH FLOW (b/t) $288,473 $294,798 $301,337 $308,098 $315,087 $322,312 $329,781 $337,501 $345,481 $353,729 Cash On Cash Return b/t 7.21% 7.37% 7.53% 7.70% 7.88% 8.06% 8.24% 8.44% 8.64% 8.84% Footnotes: b/t = before taxes;a/t = after taxes page 9 of 20
Cash In Cash Out Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Rental Income $305,664 $314,834 $324,279 $334,007 $344,028 $354,348 $364,979 $375,928 $387,206 $398,822 Miscellaneous Income $123,912 $123,912 $123,912 $123,912 $123,912 $123,912 $123,912 $123,912 $123,912 $123,912 GROSS SCHEDULED INCOME $429,576 $438,746 $448,191 $457,919 $467,940 $478,260 $488,891 $499,840 $511,118 $522,734 GROSS OPERATING INCOME $429,576 $438,746 $448,191 $457,919 $467,940 $478,260 $488,891 $499,840 $511,118 $522,734 Expenses Property Management Fee ($17,183) ($17,550) ($17,928) ($18,317) ($18,718) ($19,130) ($19,556) ($19,994) ($20,445) ($20,909) Speed Analysis Expenses ($123,920) ($126,398) ($128,926) ($131,505) ($134,135) ($136,818) ($139,554) ($142,345) ($145,192) ($148,096) TOTAL OPERATING EXPENSES ($141,103) ($143,948) ($146,854) ($149,822) ($152,853) ($155,948) ($159,110) ($162,339) ($165,637) ($169,005) NET OPERATING INCOME $288,473 $294,798 $301,337 $308,098 $315,087 $322,312 $329,781 $337,501 $345,481 $353,729 Debt Service Loan Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Principal Payments $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 NET CASH FLOW (b/t) $288,473 $294,798 $301,337 $308,098 $315,087 $322,312 $329,781 $337,501 $345,481 $353,729 Cash Flow IRR N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Projected Property Value $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 Footnotes: Cash Flow IRR based upon net cash flow and principal payments page 10 of 20
Cash In Cash Out Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Resale Expenses ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) ($240,000) Proceeds b/f Debt Payoff $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 Loan Principal Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Net Proceeds From Sale $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 $3,760,000 Net Resale IRR 1.21% 4.35% 5.47% 6.07% 6.46% 6.75% 6.97% 7.16% 7.32% 7.46% Footnotes: Cash Flow IRR based upon net cash flow and principal payments page 11 of 20
Detailed General Expenses Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Total Expenses ($141,103) ($143,948) ($146,854) ($149,822) ($152,853) ($155,948) ($159,110) ($162,339) ($165,637) ($169,005) Property Management Fee ($17,183) ($17,550) ($17,928) ($18,317) ($18,718) ($19,130) ($19,556) ($19,994) ($20,445) ($20,909) Speed Analysis Expenses ($123,920) ($126,398) ($128,926) ($131,505) ($134,135) ($136,818) ($139,554) ($142,345) ($145,192) ($148,096) page 12 of 20
Financial Indicators Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Gross Rent Multiplier 9.31 9.12 8.92 8.74 8.55 8.36 8.18 8.00 7.83 7.65 Capitalization Rate 7.21% 7.37% 7.53% 7.70% 7.88% 8.06% 8.24% 8.44% 8.64% 8.84% Cash On Cash Return b/t 7.21% 7.37% 7.53% 7.70% 7.88% 8.06% 8.24% 8.44% 8.64% 8.84% Cash On Cash Return a/t 7.21% 7.37% 7.53% 7.70% 7.88% 8.06% 8.24% 8.44% 8.64% 8.84% Debt Coverage Ratio N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Gross Income per Sq. Ft. $18.15 $18.53 $18.93 $19.34 $19.77 $20.20 $20.65 $21.11 $21.59 $22.08 Expenses per Sq. Ft. ($5.96) ($6.08) ($6.20) ($6.33) ($6.46) ($6.59) ($6.72) ($6.86) ($7.00) ($7.14) Net Income Multiplier 13.87 13.57 13.27 12.98 12.69 12.41 12.13 11.85 11.58 11.31 Operating Expense Ratio 32.85% 32.81% 32.77% 32.72% 32.67% 32.61% 32.55% 32.48% 32.41% 32.33% Loan To Value Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Footnotes: b/t = before taxes; a/t = after taxes page 13 of 20
Cumulative Analysis Description Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Equity (appreciation) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Equity (loan reduction) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 CASH FLOW (a/t) $288,473 $583,271 $884,608 $1,192,705 $1,507,792 $1,830,104 $2,159,886 $2,497,387 $2,842,868 $3,196,597 Totals - To Date $288,473 $583,271 $884,608 $1,192,705 $1,507,792 $1,830,104 $2,159,886 $2,497,387 $2,842,868 $3,196,597 Invested Capital ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ($4,000,000) ROIC - To Date 7.21% 14.58% 22.12% 29.82% 37.69% 45.75% 54.00% 62.43% 71.07% 79.91% Footnotes: a/t = after taxes; ROIC = Return On Invested Capital page 14 of 20
Sales Comparables S Office/Warehouse NNN Sale Price $4,000,000 Tenants 1 Price/Tenant $4,000,000 Price/SqFt $168.96 Cap Rate 7.21% Year Built 2000 1 Sale Date 1/4/2012 2700 Davie Blvd 2700 Davie Blvd Davie, FL 33312 Sale Price $1,550,000 Tenants 1 Price/Tenant $1,550,000 Price/SqFt $104.03 Cap Rate N/A Year Built 1997 2 Sale Date 6/6/2012 3850 Coconut Creek Pkwy 3850 Coconut Creek Pkwy Coconut Creek, FL 33066 Sale Price $2,400,000 Tenants 1 Price/Tenant $2,400,000 Price/SqFt $145.45 Cap Rate N/A Year Built 1983 page 15 of 20
Sales Comparables 3 Sale Date 5/11/2012 321 E Hillsboro Blvd 321 E Hillsboro Blvd Deerfield Beach, FL 33441 Sale Price $850,000 Tenants 1 Price/Tenant $850,000 Price/SqFt $106.25 Cap Rate N/A Year Built 1990 4 Sale Date 2/28/2012 7330 NW 5th St 7330 NW 5th St Plantation, FL 33317 Sale Price $2,000,000 Tenants 1 Price/Tenant $2,000,000 Price/SqFt $185.58 Cap Rate N/A Year Built 1963 page 16 of 20
Sales Comparables S, ($4,000,000) 1 2700 Davie Blvd, Davie, FL 33312 ($1,550,000) 2 3850 Coconut Creek Pkwy, Coconut Creek, FL 33066 ($2,400,000) 3 321 E Hillsboro Blvd, Deerfield Beach, FL 33441 ($850,000) 4 7330 NW 5th St, Plantation, FL 33317 ($2,000,000) page 17 of 20
Equity vs. Debt $4,100,000 $3,690,000 $3,280,000 $2,870,000 $2,460,000 $2,050,000 $1,640,000 $1,230,000 $820,000 $410,000 Year 1 2 3 4 5 6 7 8 9 10 Legend Equity Loan Principal Balance page 18 of 20
Cumulative Wealth Analysis $3,200,000 $2,880,000 $2,560,000 $2,240,000 $1,920,000 $1,600,000 $1,280,000 $960,000 $640,000 $320,000 Year 1 2 3 4 5 6 7 8 9 10 Legend Equity (loan reduction) Equity (appreciation) CASH FLOW (a/t) page 19 of 20
Gross Income Vs. Operating Expenses $530,000 $477,000 $424,000 $371,000 $318,000 $265,000 $212,000 $159,000 $106,000 $53,000 Year 1 2 3 4 5 6 7 8 9 10 Legend GROSS SCHEDULED INCOME Total Operating Expenses page 20 of 20