Landscape.bmp Weights.bmp List of TablesDISCLAIMER: THESE SPREADSHEETS ARE INTENDED FOR EDUCATIONAL USE ONLY. USERS SHOULD CONSULT WITH PROFESSIONAL ADVISORS AND SHOULD NOT RELY ON THE INFORMATION CONTAINED HEREIN FOR INVESTMENT DECISIONS. ANY COMPUTATIONS SHOULD BE INDEPENDENTLY VERIFIED.List of Tablesfigure 4-3a Rent Summaryfigure 4-3b Pro Forma NOIfigure 4-3c Maximum Debt Calculationfigure 4-3d Development Costsfigure 4-3eStage 1 Analysisfigure 4-4 Stage 2 Analysisfigure 4-6 Stage 3 Analysis (Part 1) Cash Flows During Development Period, Including Initial Lease-Up Activitiesfigure 4-7 Final Development Cost Summaryfigure 4-8 Stage 3 Analysis (Part 2) Annual Before and After-Tax Cash Flows during Development and Operating Periodfigure 4-9 Stage 5 Analysis – Investor ReturnNotes 1. Project OverviewPROJECT OVERVIEWMortgage Amount28,826,83170%Managing Member's Equity: 617,8105%Equity Amount12,356,20830%Member's Equity11,738,39795%Total Project Costs41,183,039100%Total Equity12,356,208100%Land Price3,900,000Hard Costs (incl. contingency + cost of bridge)28,954,915Soft Costs (incl. contingency)5,049,981Financing Costs432,402Developer's Fee1,233,462Total Development Cost39,570,761Construction Loan Interest1,109,833Operating Reserve502,445Total Project Cost41,183,039STAGE I ANALYSIS:Overall Return (Overall Cap Rate)6.54%Cash Throw-Off 730,936Cash-On-Cash Return5.92%Development Profit7,817,733STAGE II ANALYSIS: SALE IN YEAR 5Unleveraged ReturnsUnleveraged IRR12.20%Net Present Value-6,979,229Leveraged Before-Tax Return AnalysisBefore-Tax IRR23.37%Net Present Value3,406,803Leveraged After-Tax Return AnalysisAfter-Tax IRR19.66%Simple Return MeasuresYear12345NOI/Project Cost6.54%6.74%6.94%7.15%7.37%Before Tax Cash Flow/Equity5.92%6.57%7.24%7.94%8.65%Tax Shelter/Equity0.00%0.00%0.00%0.22%0.00% 2. Rental RateRENTAL RATEPropertyAvg. Rent/SF($)WeightThe Barnum House1.902%Fairfield Falls2.1222%Fairfield Landmark2.3424%Fairfield2.6522%Avalon Pines1.6510%Avalon Charles Pond1.5610%Avalon Commons1.9510%Unweighted Rental Rate2.02100%Weighted Rental Rate2.17Weighted Rental Rate with 20% Premium2.60 3. Rent SummaryRENT SUMMARYItemNo. of UnitsRent/s.f.Rentable Area/Unit s.f.Total rentable s.f.Total Gross s.f.Rent/Month/Unit $Total Annual Rent for Unit Type $Avg. Unit1122.601,086121,632126,2912,8243,794,918Total Rental Income1122.601,086121,632126,2912,8243,794,918Other Income (i.e. parking, concessions)1120.091,086121,632126,29195127,680Total Income1122.691,086121,632126,2912,9193,922,598*Blue value indicates assumption. 4. Pro Forma NOIPRO FORMA NOI - First Stabilized YearFactorPer Unit/YearAnnual Revenue/CostINCOME: Gross Potential Rental Income + Other Income3,922,598Less: Vacancy5.0%196,130Adjusted Gross Rent3,726,468Total Revenue3,726,468EXPENSES: Total Property Management Fees (% of Adjusted Gross Rent)3.0%998111,794Total Payroll & Payroll Taxes1,900212,800Total Utilities46451,968Total Administrative Exp.60067,200Total Marketing Expenses1,350151,2 ...

1. Landscape.bmp
Weights.bmp
List of TablesDISCLAIMER: THESE SPREADSHEETS ARE
INTENDED FOR EDUCATIONAL USE ONLY. USERS
SHOULD CONSULT WITH PROFESSIONAL ADVISORS AND
SHOULD NOT RELY ON THE INFORMATION CONTAINED
HEREIN FOR INVESTMENT DECISIONS. ANY
COMPUTATIONS SHOULD BE INDEPENDENTLY
VERIFIED.List of Tablesfigure 4-3a
Rent Summaryfigure 4-3b
Pro Forma NOIfigure 4-3c
Maximum Debt Calculationfigure 4-3d
Development Costsfigure 4-3eStage 1 Analysisfigure 4-4
Stage 2 Analysisfigure 4-6
Stage 3 Analysis (Part 1)
Cash Flows During Development Period, Including Initial
Lease-Up Activitiesfigure 4-7
Final Development Cost Summaryfigure 4-8
Stage 3 Analysis (Part 2)
Annual Before and After-Tax Cash Flows during Development
and Operating Periodfigure 4-9
Stage 5 Analysis – Investor ReturnNotes
1. Project OverviewPROJECT OVERVIEWMortgage
Amount28,826,83170%Managing Member's Equity:
617,8105%Equity Amount12,356,20830%Member's
Equity11,738,39795%Total Project Costs41,183,039100%Total
Equity12,356,208100%Land Price3,900,000Hard Costs (incl.
contingency + cost of bridge)28,954,915Soft Costs (incl.
contingency)5,049,981Financing Costs432,402Developer's
Fee1,233,462Total Development Cost39,570,761Construction
Loan Interest1,109,833Operating Reserve502,445Total Project

2. Cost41,183,039STAGE I ANALYSIS:Overall Return (Overall
Cap Rate)6.54%Cash Throw-Off 730,936Cash-On-Cash
Return5.92%Development Profit7,817,733STAGE II
ANALYSIS: SALE IN YEAR 5Unleveraged
ReturnsUnleveraged IRR12.20%Net Present Value-
6,979,229Leveraged Before-Tax Return AnalysisBefore-Tax
IRR23.37%Net Present Value3,406,803Leveraged After-Tax
Return AnalysisAfter-Tax IRR19.66%Simple Return
MeasuresYear12345NOI/Project
Cost6.54%6.74%6.94%7.15%7.37%Before Tax Cash
Flow/Equity5.92%6.57%7.24%7.94%8.65%Tax
Shelter/Equity0.00%0.00%0.00%0.22%0.00%
2. Rental RateRENTAL RATEPropertyAvg.
Rent/SF($)WeightThe Barnum House1.902%Fairfield
Falls2.1222%Fairfield
Landmark2.3424%Fairfield2.6522%Avalon
Pines1.6510%Avalon Charles Pond1.5610%Avalon
Commons1.9510%Unweighted Rental Rate2.02100%Weighted
Rental Rate2.17Weighted Rental Rate with 20% Premium2.60
3. Rent SummaryRENT SUMMARYItemNo. of
UnitsRent/s.f.Rentable Area/Unit s.f.Total rentable s.f.Total
Gross s.f.Rent/Month/Unit $Total Annual Rent for Unit Type
$Avg. Unit1122.601,086121,632126,2912,8243,794,918Total
Rental
Income1122.601,086121,632126,2912,8243,794,918Other
Income (i.e. parking,
concessions)1120.091,086121,632126,29195127,680Total
Income1122.691,086121,632126,2912,9193,922,598*Blue value
indicates assumption.
4. Pro Forma NOIPRO FORMA NOI - First Stabilized
YearFactorPer Unit/YearAnnual Revenue/CostINCOME: Gross
Potential Rental Income + Other Income3,922,598Less:
Vacancy5.0%196,130Adjusted Gross Rent3,726,468Total
Revenue3,726,468EXPENSES: Total Property Management Fees
(% of Adjusted Gross Rent)3.0%998111,794Total Payroll &
Payroll Taxes1,900212,800Total Utilities46451,968Total

3. Administrative Exp.60067,200Total Marketing
Expenses1,350151,200Total Contracted Services25028,000Total
Rental Expense37141,552Total Maintenance
Expense1,350151,200Total Taxes, Insurance &
Fees1,926215,712Total Operating Expenses9,2091,031,426Net
Operating Income2,695,042*Blue value indicates assumption.
5. Debt CalculationMAXIMUM DEBT CALCULATIONPro
Forma NOI and ValuePro Forma NOI2,695,042Capitalization
Rate5.5%Value (NOI/Cap Rate)49,000,771Loan TermsInterest
Rate5.5%Amortization (years)30Option (i): Using Loan to
Value (LTV)Maximum LTV70.0%Maximum Loan Based on
LTV34,300,540OR Option (ii): Using Loan-to-Cost
(LTC)Maximum LTV70.0%Total Project
Costs41,181,18741,183,039Maximum Loan Based on
LTC28,826,831OROption (iii): Using Debt Service Coverage
Ratio (DSCR)Monthly NOI224,587DSCR1.25Maximum
Monthly Payment (NOI/DSCR/12)179,669Maximum Loan Based
on DSCR31,643,708Maximum Loan (Lesser of LTV, LTC or
DSCR)Maximum Principal28,826,831Monthly
Payment163,676Annual Debt Service1,964,107*Blue value
indicates assumption.
6. Development costDEVELOPMENT COSTSNumber of
Units112Total Square Footage126,291Land Acquisition &
Project Costs:Total CostLand Cost34,821per unit3,900,000Land
CarryRateNo. of Months12%0Total Land Acquisition
Cost3,900,000Construction Cost217.60per s.f. gross
area27,480,500Bridge Cost5.15650,000Hard Cost
Contingency3%of hard cost (excl. bridge)824,415Total Hard
Cost28,954,915Soft Costs:ItemCost Per Unit*Total Cost
(for all units)AssumptionsAccounting
Fees53660,000EstimateArchitectural/MEP -
Predevelopment1,379154,500Includes 6k reimbursementLegal
Fees3,973445,000Includes 195k for Closing LegalBank
Consultant53660,000Architectural/MEP -
development7,594850,500Includes 9k reimbursEnvironmental
Survey1,116125,000DEIS - Phase 1 and 2, Asbestos

4. SurveyEquipment and Amenities2,232250,000Insurance (GL,BR
& Umbrella)4,464500,000Estimate from Peoples
InsurancePermits, Fees and Offsites4,107460,000Building
Permit, Site Plan App, Proffer Obligations, SCDHS, DEC,
Traffic Study36641,000RE Taxes During
Construction62570,000Currently $35k/yearRecordation
Fees2,321260,0001.45% of Loan AmountSecurity at
Site44650,000During constructionCivil
Engineering2,714304,000Includes SWPP Inspections, includes
Landscape Architect $50kSurvey-
TOPO11613,000Marketing/Advertising2,232250,000Utility
Connections1,339150,000Other Soft
Costs1,875210,000Independent Inspections Public and Private,
ADA, Thermal Moisture, LEED, ReimbursablesCM Precon
Fee71480,000Reimbursable upon Site Plan approvalOperating
Reserves Year 14,344486,4945 Months of Stabilized
OpExGeotech49155,000Title Insurance25428,40010bps or
MortgageTotal Soft Costs43,7764,902,894.30Financing Costs:
Guarantee Fee1%288,268Loan Origination Fee0.5%of
permanent loan amount144,134Total Financing
Costs432,402Total Development Cost:Total Soft + Financing
Costs5,335,297Developer's Fee3%of total budget1,233,462Soft
Cost Contingency3%% of soft costs147,087Total Development
Cost (excl. Interest and Operating Reserve for Lease-
up)39,570,761Estimate of Construction InterestPermanent
Loan28,826,831Construction Interest5.50%Construction Period
(months)14Average Draw60%Estimated Construction Loan
Interest1,109,833Total Project Cost before Operating
Reserve40,680,594Estimate of Operating ReserveGross
potential Rent (monthly)326,883Lease-up Period
(months)8Average Occupancy during Lease-up47.5%Estimated
rent during lease-up1,242,156Estimated op. expenses during
lease-up687,617NOI during lease-up554,539Construction
interest during lease-up1,056,984Operating reserve during
lease-up502,445Total Project Costs41,183,039*Blue value
indicates assumption.

5. Construction InterestConstruction Loan28,826,831Beginning
Month 18Interest Rate5.50%Amortization (months)360Term
(months)120Equity Contribution12,356,208Monthly
Payment163,676- Predevelopment to Site Plan Approval --
Predevelopment to Building Permit -- Construction -- Lease Up
-Loan Analysis (Monthly)Month
Beginning5/1/136/1/137/1/138/1/139/1/1310/1/1311/1/1312/1/1
31/1/142/1/143/1/144/1/145/1/146/1/147/1/148/1/149/1/1410/1/
1411/1/1412/1/141/1/152/1/153/1/154/1/155/1/156/1/157/1/158/
1/159/1/1510/1/1511/1/1512/1/151/1/162/1/163/1/164/1/165/1/1
66/1/167/1/168/1/169/1/1610/1/1611/1/1612/1/161/1/172/1/173/
1/174/1/175/1/176/1/177/1/178/1/179/1/1710/1/1711/1/1712/1/1
71/1/182/1/183/1/184/1/185/1/186/1/187/1/188/1/189/1/1810/1/
1811/1/1812/1/181/1/192/1/193/1/194/1/195/1/196/1/197/1/198/
1/199/1/1910/1/1911/1/1912/1/191/1/202/1/203/1/204/1/205/1/2
06/1/207/1/208/1/209/1/2010/1/2011/1/2012/1/201/1/212/1/213/
1/214/1/215/1/216/1/217/1/218/1/219/1/2110/1/2111/1/2112/1/2
11/1/222/1/223/1/224/1/225/1/226/1/227/1/228/1/229/1/2210/1/
2211/1/2212/1/221/1/232/1/233/1/234/1/235/1/236/1/237/1/238/
1/239/1/2310/1/2311/1/2312/1/231/1/242/1/243/1/244/1/24Mont
h 1Month 2Month 3Month 4Month 5Month 6Month 7Month
8Month 9Month 10Month 11Month 12Month 13Month 14Month
15Month 16Month 17Month 18Month 19Month 20Month
21Month 22Month 23Month 24Month 25Month 26Month
27Month 28Month 29Month 30Month 31Month 32Month
33Month 34Month 35Month 36Month 37Month 38Month
39Month 40Month 41Month 42Month 43Month 44Month
45Month 46Month 47Month 48Month 49Month 50Month
51Month 52Month 53Month 54Month 55Month 56Month
57Month 58Month 59Month 60Month 61Month 62Month
63Month 64Month 65Month 66Month 67Month 68Month
69Month 70Month 71Month 72Month 73Month 74Month
75Month 76Month 77Month 78Month 79Month 80Month
81Month 82Month 83Month 84Month 85Month 86Month
87Month 88Month 89Month 90Month 91Month 92Month
93Month 94Month 95Month 96Month 97Month 98Month

6. 99Month 100Month 101Month 102Month 103Month 104Month
105Month 106Month 107Month 108Month 109Month 110Month
111Month 112Month 113Month 114Month 115Month 116Month
117Month 118Month 119Month 120Month 121Month 122Month
123Month 124Month 125Month 126Month 127Month 128Month
129Month 130Month 131Month 132Equity
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126,646-253,123-379,429-505,564-631,527-757,317-882,933-
1,008,375-1,133,642-1,258,733-1,383,646-1,508,383-1,632,940-

10. 1,757,319-1,881,517-2,005,534-2,129,370-2,253,023-2,376,492-
2,499,777-2,622,878-2,745,792-2,868,519-2,991,059-3,113,410-
3,235,571-3,357,543-3,479,323-3,600,911-3,722,307-3,843,508-
3,964,515-4,085,327-4,205,942-4,326,359-4,446,578-4,566,598-
4,686,418-4,806,037-4,925,454-5,044,669-5,163,679-5,282,485-
5,401,085-5,519,478-5,637,664-5,755,642-5,873,410-5,990,967-
6,108,313-6,225,447-6,342,368-6,459,074-6,575,565-6,691,840-
6,807,897-6,923,736-7,039,356-7,154,756-7,269,934-7,384,890-
7,499,623-7,614,132-7,728,415-7,842,472-7,956,301-8,069,902-
8,183,274-8,296,414-8,409,324-8,522,000-8,634,443-8,746,651-
8,858,623-8,970,358-9,081,855-9,193,113-9,304,131-9,414,907-
9,525,441-9,635,731-9,745,777-9,855,577-9,965,130-
10,074,434-10,183,490-10,292,295-10,400,849-10,509,150-
10,617,198-10,724,990-10,832,526-10,939,805-11,046,826-
11,153,586-11,260,086Mortgage
ContributionERROR:#REF!000000000000000ERROR:#REF!ER
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937,19937,36937,54137,71337,88638,05938,23438,40938,58538
,76238,93939,11839,29739,47739,65839,84040,02340,20640,39
040,57540,76140,94841,13641,32441,51441,70441,89542,08742
,28042,47442,66942,86443,06143,25843,45643,65543,85644,05
744,25944,46144,66544,87045,07645,28245,49045,69845,90846
,11846,32946,54246,75546,96947,18547,40147,61847,83648,05
648,27648,49748,71948,94349,16749,39249,61949,84650,07550
,30450,53550,76650,99951,23351,46851,70351,94052,17952,41
852,65852,89953,14253,38553,63053,87654,12354,37154,62054
,87055,12255,37455,62855,88356,13956,39756,65556,91557,17
657,438Payoff
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
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ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF

11. !ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!126,646126,477126,306126,135125,963125,790125,
616125,442125,267125,091124,914124,736124,558124,378124,
198124,017123,836123,653123,470123,285123,100122,914122,
727122,540122,351122,162121,971121,780121,588121,395121,
202121,007120,811120,615120,418120,219120,020119,820119,
619119,417119,214119,010118,806118,600118,393118,186117,
977117,768117,558117,346117,134116,921116,706116,491116,
275116,057115,839115,620115,400115,178114,956114,733114,
509114,283114,057113,829113,601113,371113,141112,909112,
677112,443112,208111,972111,735111,497111,258111,018110,
776110,534110,290110,046109,800109,553109,305109,056108,
805108,554108,301108,047107,792107,536107,279107,020106,
761106,500106,238Payoff
Revenue000000000000000000000000000062,6500ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E

12. RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!Ending Mortgage
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!Ending loan
balanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER

13. ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!-126,646-253,123-379,429-505,564-631,527-
757,317-882,933-1,008,375-1,133,642-1,258,733-1,383,646-
1,508,383-1,632,940-1,757,319-1,881,517-2,005,534-2,129,370-
2,253,023-2,376,492-2,499,777-2,622,878-2,745,792-2,868,519-
2,991,059-3,113,410-3,235,571-3,357,543-3,479,323-3,600,911-
3,722,307-3,843,508-3,964,515-4,085,327-4,205,942-4,326,359-
4,446,578-4,566,598-4,686,418-4,806,037-4,925,454-5,044,669-
5,163,679-5,282,485-5,401,085-5,519,478-5,637,664-5,755,642-
5,873,410-5,990,967-6,108,313-6,225,447-6,342,368-6,459,074-
6,575,565-6,691,840-6,807,897-6,923,736-7,039,356-7,154,756-
7,269,934-7,384,890-7,499,623-7,614,132-7,728,415-7,842,472-
7,956,301-8,069,902-8,183,274-8,296,414-8,409,324-8,522,000-
8,634,443-8,746,651-8,858,623-8,970,358-9,081,855-9,193,113-
9,304,131-9,414,907-9,525,441-9,635,731-9,745,777-9,855,577-
9,965,130-10,074,434-10,183,490-10,292,295-10,400,849-
10,509,150-10,617,198-10,724,990-10,832,526-10,939,805-
11,046,826-11,153,586-11,260,086-11,366,324Loan Analysis
(Annual)Year
Beginning5/1/135/1/145/1/155/1/165/1/175/1/185/1/195/1/205/1
/215/1/225/1/23Year 1Year 2Year 3Year 4Year 5Year 6Year
7Year 8Year 9Year 10Year 11Beginning loan
balance28,826,831ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!Principal
PaymentERROR:#REF!ERROR:#REF!ERROR:#REF!457,81348
3,637510,918539,738570,184602,346636,323672,217Interest
PaymentERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!Ending loan
balanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!Interest during

14. construction period: ERROR:#REF!
7. Stage I AnalysisSTAGE I ANALYSIS: SIMPLE RATIOSNet
Operating Income (1st stabilized yr)2,695,042Total Project
Cost41,183,039Overall Return (Overall Cap Rate) (1st
stabilized yr)6.5%Net Operating Income2,695,042Annual Debt
Service1,964,107Cash Throw-Off (Before-Tax Cash
Flow)730,936Total Project Cost41,183,039Permanent
Mortgage28,826,831Equity12,356,208Cash-On-Cash Return (1st
stabilized yr)5.9%NOI2,695,042Overall Cap-Rate at
Sale5.5%Capitalized Value49,000,771Total Project
Cost41,183,039Development Profit7,817,733*Blue value
indicates assumption.
8. Stage II Analysis- 5 YrSTAGE II ANALYSIS - SALE IN
YEAR 5Project CostsTotal Project Cost41,183,039Total Proj.
Cost Before Op. Reserve40,680,594Land
Cost3,900,000Financing
AssumptionsEquity12,356,208Mortgage
Principal28,826,831Annual Interest Rate5.50%Amortization
(years)30Annual Debt Service1,964,107Depreciation
AssumptionsBuilding Basis37,283,039Life (in
years)27.5Acceleration Factor1Straight line
(calculated)1,355,747Year12345678910MORTGAGE
CALCULATIONYear12345678910Beginning
Balance28,826,83128,438,50828,028,28027,594,91227,137,099
26,653,46226,142,54425,602,80525,032,62224,430,275Amortiz
ation of
Principal388,323410,228433,368457,813483,637510,918539,73
8570,184602,346636,323Interest
Payment1,575,7841,553,8791,530,7391,506,2941,480,4701,453,
1891,424,3691,393,9231,361,7601,327,783Ending
Balance28,438,50828,028,28027,594,91227,137,09926,653,462
26,142,54425,602,80525,032,62224,430,27523,793,952DEPREC
IATION CALCULATIONYear12345678910Beginning
Balance37,283,03935,927,29234,571,54533,215,79831,860,051
30,504,30429,148,55727,792,81126,437,06425,081,317Less:
Annual

15. Depreciation1,355,7471,355,7471,355,7471,355,7471,355,7471,
355,7471,355,7471,355,7471,355,7471,355,747Ending
Balance35,927,29234,571,54533,215,79831,860,05130,504,304
29,148,55727,792,81126,437,06425,081,31723,725,570Cumulat
ive Depreciation
Taken1,355,7472,711,4944,067,2415,422,9876,778,7348,134,48
19,490,22810,845,97512,201,72213,557,469Cumulative Straight
Line1,355,7472,711,4944,067,2415,422,9876,778,7348,134,481
9,490,22810,845,97512,201,72213,557,469Recapture000000000
0Remaining Book
Value39,827,29238,471,54537,115,79835,760,05134,404,30433,
048,55731,692,81130,337,06428,981,31727,625,570ANNUAL
CASH FLOWSYear1234567891012345678910Gross
RentInflation
Rate:3.0%3,922,5984,040,2764,161,4854,286,3294,414,9194,54
7,3674,683,7884,824,3014,969,0305,118,101VacancyVacancy
Rate:5.0%-196,130-202,014-208,074-214,316-220,746-227,368-
234,189-241,215-248,452-255,905Adjusted Gross
Income3,726,4683,838,2633,953,4104,072,0134,194,1734,319,9
984,449,5984,583,0864,720,5794,862,196Operating
ExpensesInflation
Rate:3.0%1,031,4261,062,3691,094,2401,127,0671,160,8791,19
5,7051,231,5771,268,5241,306,5801,345,777Other
Expenses0000000000Total
Expenses1,031,4261,062,3691,094,2401,127,0671,160,8791,195
,7051,231,5771,268,5241,306,5801,345,777Net Operating
Income2,695,0422,775,8942,859,1712,944,9463,033,2943,124,2
933,218,0223,314,5623,413,9993,516,419Annual Debt Service-
1,964,107-1,964,107-1,964,107-1,964,107-1,964,107-1,964,107-
1,964,107-1,964,107-1,964,107-1,964,107Before-Tax Operating
Cash
Flow730,936811,787895,064980,8391,069,1871,160,1861,253,9
151,350,4551,449,8921,552,312Tax Calculation:Net Operating
Income2,695,0422,775,8942,859,1712,944,9463,033,2943,124,2
933,218,0223,314,5623,413,9993,516,419Interest-1,575,784-
1,553,879-1,530,739-1,506,294-1,480,470-1,453,189-1,424,369-

16. 1,393,923-1,361,760-1,327,783Depreciation-1,355,747-
1,355,747-1,355,747-1,355,747-1,355,747-1,355,747-1,355,747-
1,355,747-1,355,747-1,355,747Taxable Income (Loss)-236,488-
133,732-
27,31682,905197,078315,357437,906564,892696,492832,889Pa
ssive Loss Offset000-27,316000000Taxable
Income00055,589197,078315,357437,906564,892696,492832,88
9Passive Loss Carryforward-236,488-133,732-
27,3160000000TaxesTax
Rate:28.0%00015,56555,18288,300122,614158,170195,018233,
209After Tax Cash Flow:Before-Tax Operating Cash
Flow730,936811,787895,064980,8391,069,1871,160,1861,253,9
151,350,4551,449,8921,552,312Taxes000-15,565-55,182-
88,300-122,614-158,170-195,018-233,209After-Tax Operating
Cash
Flow730,936811,787895,064965,2741,014,0051,071,8861,131,3
011,192,2861,254,8751,319,103ANALYSIS OF SALE IN YEAR
5SALE CALCULATIONSale Year5Before Tax Cash Flow from
Sale:Sale PriceCap Rate (NOIsale year
+1):5.5%56,805,324Closing Costs3.0%-1,704,160Adjusted
Sales Price55,101,164Remaining Mortgage Balance-
26,653,462Before-Tax Cash Flow from
Sale28,447,702Taxes:Adjusted Sales Price55,101,164Remaining
Book Value-34,404,304Total Taxable Gain20,696,860Passive
Loss Carryforward0Total Gain20,696,860Total Depreciation
Taken6,778,734Recapture Tax @ 25%Recapture Rate:25.0%-
1,694,684Capital Gain13,918,126Tax on Capital GainTax Rate
on Capital Gain:20.0%2,783,625After-Tax Cash Flow from
Sale:Before-Tax Cash Flow from Sale28,447,702Total Tax-
4,478,309After-Tax Cash Flow from Sale23,969,394RETURN
MEASURESYear1234567UNLEVERAGED IRRProject
CostInvestment-41,183,039Net Operating
Income2,695,0422,775,8942,859,1712,944,9463,033,294Adjuste
d Sales Price55,101,164Total Before-Tax Cash FlowInvestment-
41,183,0392,695,0422,775,8942,859,1712,944,94658,134,458U
nleveraged IRR=12.20%Net Present ValueDiscount Rate

17. @17.0%=-6,979,229BEFORE-TAX IRREquityInvestment-
12,356,208Before-Tax Operating Cash
Flow730,936811,787895,064980,8391,069,187Before-Tax Cash
Flow from Sale28,447,702Total Before-Tax Cash
FlowInvestment-
12,356,208730,936811,787895,064980,83929,516,889Before-
Tax IRR=23.37%Net Present ValueDiscount Rate
@17.0%=3,406,803AFTER-TAX IRREquityInvestment-
12,356,208After-Tax Operating Cash
Flow730,936811,787895,064965,2741,014,005After-Tax Cash
Flow from Sale23,969,394Total After-Tax Cash
FlowInvestment-
12,356,208730,936811,787895,064965,27424,983,399After-Tax
IRR=19.66%SIMPLE RETURN MEASURESNOI/Project
Cost6.54%6.74%6.94%7.15%7.37%Before Tax Cash
Flow/Equity5.92%6.57%7.24%7.94%8.65%Tax
Shelter/Equity0.00%0.00%0.00%0.22%0.00%*Blue value
indicates assumption.
Stage III Dev. Cost SummaryDEVELOPMENT COST
SUMMARYYearTOTAL012USESTotal Dev
CostsERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!Capitalized Constr. Loan int.4
quartersERROR:#REF!0ERROR:#REF!ERROR:#REF!Total
Capital
CostsERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!Cash Flow from
Operations:NOIERROR:#REF!0ERROR:#REF!ERROR:#REF!C
onstr. Loan int during
ops.ERROR:#REF!0ERROR:#REF!ERROR:#REF!Permanent
debt service0000Cash Flow from Operations After
InterestERROR:#REF!0ERROR:#REF!ERROR:#REF!Total
UsesERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!SOURCESConstr. Loan Ending
BalanceERROR:#REF!0ERROR:#REF!ERROR:#REF!Perm.
Loan ending balance000Equity ending
balanceERROR:#REF!0ERROR:#REF!ERROR:#REF!Constructi

18. on Loan
SourcesERROR:#REF!0ERROR:#REF!ERROR:#REF!Permanen
t Loan Sources0000Equity
SourcesERROR:#REF!0ERROR:#REF!ERROR:#REF!Additiona
l Equity
RequiredERROR:#REF!0ERROR:#REF!ERROR:#REF!Positive
Cash Flow After
InterestERROR:#REF!0ERROR:#REF!ERROR:#REF!Total
SourcesERROR:#REF!0ERROR:#REF!ERROR:#REF!Check (2
methods)Equity for Capital
InvestmentERROR:#REF!0ERROR:#REF!ERROR:#REF!Equity
for Capital
InvestmentERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR
:#REF!SummaryCapital Costs:Total Development Cost
Excluding InterestERROR:#REF!Interest Accrued During
ConstructionERROR:#REF!Total Capital
CostsERROR:#REF!Depreciable Basis:Total Capital
CostsERROR:#REF!Land CostERROR:#REF!Depreciable Basis
ERROR:#REF!Operating Reserve:Operating Loss During Lease-
upERROR:#REF!Interest Accrued During Operating
PeriodERROR:#REF!Interest Paid During Operating
PeriodERROR:#REF!Total Operating Reserve Funded by
Construction LoanERROR:#REF!Total Project
Cost:ERROR:#REF!Positive Cash Flow After
InterestERROR:#REF!Total Project Cost After First Year
OperationsERROR:#REF!Cash Proceeds from Permanent Loan
Takeout:Permanent Mortgage Amount28,826,831Construction
Loan Ending BalanceERROR:#REF!Cash proceeds from
Permanent Loan TakeoutERROR:#REF!Stage I vs. Stage III
ComparisonStage IStage IIIConstruction
Interest1,109,833ERROR:#REF!Operating
Reserve502,445ERROR:#REF!
Stage III Combined Dev+Op PerCOMBINED ANNUAL
BEFORE- & AFTER-TAX CASH FLOWS DURING
DEVELOPMENT AND OPERATING PERIOD– Development
Period –– Investment Period –Mortgage CalculationInitial

19. InvestmentYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year
8Year 9Year 10Year 11Year 12Beginning
Balance28,826,83128,826,83128,438,50828,028,28027,594,912
27,137,09926,653,46226,142,54425,602,80525,032,62224,430,2
75Ending
Balance28,826,83128,438,50828,028,28027,594,91227,137,099
26,653,46226,142,54425,602,80525,032,62224,430,27523,793,9
52Amortization of
Principal388,323410,228433,368457,813483,637510,918539,73
8570,184602,346636,323Interest1,575,7841,553,8791,530,7391,
506,2941,480,4701,453,1891,424,3691,393,9231,361,7601,327,
783DEPRECIATION CALCULATIONYear 1Year 2Year 3Year
4Year 5Year 6Year 7Year 8Year 9Year 10Year 11Year
12Beginning
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!Less: Annual
DepreciationERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Ending
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!ERROR:#REF!Cumulative
Depreciation
TakenERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!Cumulative Straight
Line1,355,7472,711,4944,067,2415,422,9876,778,7348,134,481
9,490,22810,845,97512,201,72213,557,46914,913,215Recapture
ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!Remaining Book
ValueERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!ANNUAL CASH
FLOWSYear 1Year 2Year 3Year 4Year 5Year 6Year 7Year

20. 8Year 9Year 10Year 11Year 12Gross
Rent3%3,922,5984,040,2764,414,9194,547,3674,683,7884,824,
3014,969,0305,118,1015,271,6445,429,7945,592,687Vacancy
Rate5%0000000000Vacancy
($)ERROR:#REF!202,014220,746227,368234,189241,215248,4
52255,905263,582271,490279,634Adjusted Gross
IncomeERROR:#REF!3,838,2634,194,1734,319,9984,449,5984,
583,0864,720,5794,862,1965,008,0625,158,3045,313,053Total
Cash
InERROR:#REF!3,838,2634,194,1734,319,9984,449,5984,583,0
864,720,5794,862,1965,008,0625,158,3045,313,053Operating
Expenses5%1,031,4261,082,9971,137,1471,194,0051,253,7051,
316,3901,382,2101,451,3201,523,8861,600,0801,680,084Total
Expenses1,031,4261,082,9971,137,1471,194,0051,253,7051,316
,3901,382,2101,451,3201,523,8861,600,0801,680,084Net
Operating
IncomeERROR:#REF!2,755,2653,057,0263,125,9943,195,8933,
266,6963,338,3693,410,8763,484,1763,558,2243,632,969-
Construction Loan InterestERROR:#REF!- Annual Debt
Service0-1,964,107-1,964,107-1,964,107-1,964,107-1,964,107-
1,964,107-1,964,107-1,964,107-1,964,107-1,964,107+
Operating Reserve Funded by Const. LoanERROR:#REF!Before
Tax Cash
FlowERROR:#REF!791,1581,092,9191,161,8871,231,7871,302,
5891,374,2621,446,7691,520,0691,594,1171,668,862TAX
CALCULATIONYear 1Year 2Year 3Year 4Year 5Year 6Year
7Year 8Year 9Year 10Year 11Year 12Net Operating
IncomeERROR:#REF!2,755,2653,057,0263,125,9943,195,8933,
266,6963,338,3693,410,8763,484,1763,558,2243,632,969-
InterestERROR:#REF!-1,575,784-1,553,879-1,530,739-
1,506,294-1,480,470-1,453,189-1,424,369-1,393,923-1,361,760-
1,327,783-
DepreciationERROR:#REF!ERROR:#REF!ERROR:#REF!ERRO
R:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Taxable
Income

21. (Loss)ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!ERROR:#REF!ERROR:#REF!Less: Passive Loss
Offset0ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!Taxable
IncomeERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!Passive Loss
CarryforwardERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Taxes28%E
RROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERR
OR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:
#REF!ERROR:#REF!AFTER-TAX CASH FLOW FROM
OPERATIONSYear 1Year 2Year 3Year 4Year 5Year 6Year
7Year 8Year 9Year 10Year 11Year 12Before Tax Cash
FlowERROR:#REF!791,1581,092,9191,161,8871,231,7871,302,
5891,374,2621,446,7691,520,0691,594,1171,668,862Less:
Taxes0ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
ERROR:#REF!ERROR:#REF!After Tax Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!ERROR:#REF!SALE
CALCULATIONYear 1Year 2Year 3Year 4Year 5Year 6Year
7Year 8Year 9Year 10Year 11Year 120Sales Price EOY 9
(based on Year 10 NOI)5.5%63,348,6540Less:
Commission3.0%1,900,4600Adjusted Sales
Price61,448,1950Less: Remaining Balance on
Mortgage25,602,8050Cash From Sale Before
Tax35,845,38900Taxes:0Adjusted Sales Price61,448,1950Less:
Remaining Book ValueERROR:#REF!0Total Taxable
GainERROR:#REF!0Less: Passive Loss
CarryforwardERROR:#REF!0Total Gain after passive
lossERROR:#REF!0 Total Depreciation

22. TakenERROR:#REF!0 Recapture
Tax25%ERROR:#REF!Capital GainERROR:#REF! Tax on
Capital Gain20%ERROR:#REF!Total Tax From
SaleERROR:#REF!0Cash From Sale Before
Tax35,845,3890Less: TaxERROR:#REF!0Cash From Sale After
TaxERROR:#REF!0RETURN ANALYSISYear 1Year 2Year
3Year 4Year 5Year 6Year 7Year 8Year 9Equity (-
)ERROR:#REF!ERROR:#REF!ERROR:#REF!Cash Proceeds
from Perm. TakeoutERROR:#REF!Before Tax Cash Flows from
Operations0ERROR:#REF!791,1581,092,9191,161,8871,231,78
71,302,5891,374,2621,446,769Cash Flow From Sale Before
Tax35,845,389Total Before Tax Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!791,1581,092,
9191,161,8871,231,7871,302,5891,374,26237,292,159Before
Tax IRRERROR:#VALUE!Equity(-
)ERROR:#REF!ERROR:#REF!ERROR:#REF!Cash Proceeds
from Perm. TakeoutERROR:#REF!After Tax Cash Flows from
OperationsERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR
:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!Cash Flow From Sale After
TaxERROR:#REF!Total After Tax Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ER
ROR:#REF!ERROR:#REF!After Tax IRRERROR:#VALUE!
Stage V Investors AnalysisSTAGE V ANALYSIS: INVESTOR
RETURNthe "whole pie" - putting together deal into standard
JV syndication format; this tab deals with the priority
distribution of cash flowsInitial
EquityERROR:#REF!Cumulative Preferred Return7%Investor
Priority Payback of Equity50%Investor Share of Remaining
Cash Flow70%– Development Period –– Investment Period –
Initial InvestmentYear 1Year 2Year 3Year 4Year 5Year 6Year
7Year 8Year 9Before Tax Cash
FlowERROR:#REF!ERROR:#REF!791,1581,092,9191,161,8871
,231,7871,302,5891,374,26237,292,159Preferred
Return:Beginning Equity Account

23. BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
cumulative preferred return = any unpaid preferential return in
the current year is accrued and paid in the future when cash
flow is available/sufficientPreferred Return
EarnedERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
non-cumulative preferred return = any year in which there is not
enough cash to pay the full preferred return is simply forgotten
(developers prefer this option)Preferred Return Paid
CurrentlyERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!Unpaid Return Account:Beginning
Balance0ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Deferred
Preferred
ReturnERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Deferred Preferred Return
PaidERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!En
ding
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Equity Account Balance:Beginning Equity Account
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Equity
PaybackERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!Ending
BalanceERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Equity Payments Re-Cap:Preferred Return Paid
CurrentlyERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF

24. !Deferred Preferred Return
PaidERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Eq
uity
PaybackERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#
REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!Total Payments on
EquityERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Remaining Cash Flow:Before Tax Cash
FlowERROR:#REF!791,1581,092,9191,161,8871,231,7871,302,
5891,374,26237,292,159Total Payments on
EquityERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Remaining Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Inv
estor Share of Remaining Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Inv
estor Cash Flow Recap:InvestmentERROR:#REF!Total
Payments on
EquityERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!
Investor Share of Remaining Cash
FlowERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF
!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!Be
fore-Tax Investor Cash
FlowERROR:#REF!0ERROR:#REF!ERROR:#REF!ERROR:#RE
F!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!E
RROR:#REF!Investor Before-Tax
IRR=ERROR:#VALUE!ideally, you want this # to be 20%, but
in today's much lower IR environment, you can get deals done
with IRR as low as 12-13% depending on risk. But if it's a new
deal, you want to shoot for at least 15-20% because of increased
risk of new developmentNet Present ValueDiscount Rate

25. @7%=ERROR:#REF!Developer Cash Flows:Before-Tax Cash
Flow to
DeveloperERROR:#REF!0ERROR:#REF!ERROR:#REF!ERROR
:#REF!ERROR:#REF!ERROR:#REF!ERROR:#REF!ERROR:#R
EF!ERROR:#REF!Net Present ValueDiscount Rate
@7%=ERROR:#REF!
notesNotes1. Land carry refers to interest paid to the land
seller as part of the land purchase contract.2. This calculation
is a preliminary estimate of interest during construction. A more
accurate estimate will be made as part of the Stage 3 analysis,
and even more accurate estimate in Stage 4 (not shown).3.
Operating Reserve during lease-up represents the subsidy that
will be required to cover operating costs and debt service before
the project reaches break-even occupancy. 4. Based on market
studies, the project is projected to lease at a rate of 16.6 units
per month. The project will then take 12 months to be fully
leased. (200 ÷ 16.6 =12)5. Net Present Value equals the present
value of future cash flows, less the initial investment. The
unleveraged NPV represents the development profit.6. The
permanent mortgage balance was determined based on value and
cash flow. During the development period, only interest would
be paid on the construction loan. Amortization would begin
upon the funding of the permanent loan, after stabilization.7.
The depreciable basis is the total project cost, excluding land
costs and operating losses during the lease-up period. The
remaining book value includes the land cost. Personal property
is included in the depreciable basis here for simplicity. It can
be tracked separately. Also, apartment buildings may be
brought on-stream at different in successive months as
construction is completed. A separate depreciation spreadsheet
may be added to account for these nuances. That level of
accuracy, however, is inappropriate for early Stage 2 analyses
since other assumptions are at best good approximations. 8.
The operating reserve includes funds needed to cover operating
costs and debt service during the lease-up period.9. Current tax
laws treat real estate as passive income and limit the amount of

26. loss one can take. Passive losses can only be taken against other
passive income (with minor adjustments for small investors). In
this example, passive loss limitation rules do not apply since
taxable income is positive. Stage 3, Table 15, shows the
treatment where Taxable Income is negative. See Brueggeman
and Fisher (2002) for more information.10Equity for Capital
Investment provides a helpful check for Stage 3. One must be
careful not to double count this equity since it comes not only
from new equity but also from positive operating cash flows
during lease-up. Line 30 and Line 31 in Table 14 should be
equal for each year.
9. Sensitivity AnalysisSENSITIVITY ANALYSIS: BASED ON
TERMINAL CAP RATE CHANGESNote: Values are hard-
coded and do not automatically update. Based on assumptions
noted in the "Harbor View Teaching Note". TERMINAL CAP
RATE OF 5.0%Hurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-3,036,558-3,760,125-4,466,003-5,154,703-5,826,721-
6,482,536Levered Before-Tax
NPV6,669,1506,289,8745,920,0295,559,3395,207,5384,864,369
Levered After-Tax
NPV3,977,4123,655,3693,341,3023,034,9792,736,1752,444,673
TERMINAL CAP RATE OF 5.5%Hurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-5,659,996-6,327,748-6,979,229-7,614,909-8,235,244-
8,840,673Levered Before-Tax
NPV4,045,7123,722,2523,406,8033,099,1332,799,0152,506,232
Levered After-Tax
NPV1,878,6621,601,2711,330,7211,066,814809,357558,163TE
RMINAL CAP RATE OF 6.0%Hurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-7,846,194-8,467,433-9,073,583-9,665,080-10,242,346-
10,805,787Levered Before-Tax
NPV1,859,5141,582,5661,312,4491,048,961791,913541,118Lev
ered After-Tax NPV129,703-110,477-344,762-573,323-796,325-
1,013,928TERMINAL CAP RATE OF 6.5%Hurdle

27. Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-9,696,055-10,277,936-10,845,729-11,399,841-11,940,663-
12,468,576Levered Before-Tax NPV9,653-227,937-459,698-
685,799-906,404-1,121,671Levered After-Tax NPV-1,350,185-
1,558,880-1,762,479-1,961,132-2,154,979-2,344,159Note:
These values are based on a five-year analysis (sale in year 5).
Assumes all else equal at a rental rate of
$2.60/SF.SENSITIVITY ANALYSIS: BASED ON RENTAL
RATE CHANGESRENTAL RATE OF $2.20 PER SQUARE
FOOTHurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-12,609,546-13,143,997-13,665,425-14,174,206-
14,670,706-15,155,275Levered Before-Tax NPV-4,082,272-
4,314,234-4,540,429-4,761,027-4,976,188-5,186,072Levered
After-Tax NPV-5,177,470-5,386,130-5,589,617-5,788,080-
5,981,666-6,170,516RENTAL RATE OF $2.40 PER SQUARE
FOOTHurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-9,261,765-9,862,867-10,449,321-11,021,552-11,579,969-
12,124,968Levered Before-Tax NPV328,93368,044-186,360-
434,468-676,462-912,521Levered After-Tax NPV-1,275,412-
1,502,168-1,723,306-1,938,989-2,149,377-2,354,623RENTAL
RATE OF $2.60 PER SQUARE FOOTHurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-5,659,996-6,327,748-6,979,229-7,614,909-8,235,244-
8,840,673Levered Before-Tax
NPV4,045,7123,722,2523,406,8033,099,1332,799,0152,506,232
Levered After-Tax
NPV1,878,6621,601,2711,330,7211,066,814809,357558,163RE
NTAL RATE OF $2.80 PER SQUARE FOOTHurdle
Rate16.0%16.5%17.0%17.5%18.0%18.5%Unlevered Before-Tax
NPV-2,027,427-2,761,829-3,478,336-4,177,466-4,859,718-
5,525,577Levered Before-Tax
NPV7,678,2817,288,1716,907,6956,536,5766,174,5405,821,327
Levered After-Tax
NPV4,804,2224,474,0814,152,0653,837,9373,531,4693,232,441

28. Note: These values are based on a five-year analysis (sale in
year 5). Assumes all else equal at a terminal cap rate of 5.5%.
10. Sources & UsesSOURCES & USESSources: Mortgage
Amount (70%)28,826,831Equity Amount
(30%)12,356,208Managing Member's Equity
(5%)617,810Member's Equity (95%)11,738,397Total Project
Funding41,183,039Uses:Land Price3,900,000Hard Costs (incl.
contingency + bridge cost)28,954,915Soft Costs (incl.
contingency)5,049,981Financing Costs432,402Developer's
Fee1,233,462Total Development Cost39,570,761Construction
Loan Interest1,109,833Operating Reserve502,445Total Project
Cost41,183,039