Competitive Forces Analysis Group Assignment Do some research to.docx

Competitive Forces Analysis Group Assignment
Do some research to find an organization that is selling a
product or a service. Using the Five Forces Model, write an
analysis of how Information Technology/Information Systems
(IT/IS) is or could impact EACH of the 5 forces (positively or
negatively) in your chosen organization. For a richer analysis,
feel free to discuss and reference any other strategic models or
material from the text, but remember you MUST analyze the
firm with respect to IT/IS and each of the forces. A grading
rubric is also posted on BB along with these instructions.
Choose an organization that allows for a robust discussion. This
includes firms you may know about or can find information
about (via interviews, readings, research etc.).
This work should show that you clearly understand each of the
forces, you understand how each force is impacting your
organization, and you understand the role IT/IS either is having
or could have with respect to each force.
You should be specific; general statements without examples or
detail will not be well received. You may find that your firm is
not using IT/IS to impact a particular force (as far as you can
tell). Stretch yourself to come up with possibilities as to how
they COULD use IT/IS for positive impact. Again, be specific.
Do not simply say “they need an information system for
customers.” Rather, be certain to describe what type of system
(or functionality of the system) you would recommend and why
this system would make a difference.
This is a formal paper and should be free of grammar, word
usage, and sentence structure errors. The paper must be well
organized and free of typos. All work MUST be cited in both a
Works Cited page and inside the text. All group members
should proofread the final draft CAREFULLY prior to
submission.
No page length rule. Just get the job done – well. Each team
member should contribute equally Please do not assign a

different person to write sections of the paper and expect to just
tie them together. This will lead to a fragmented paper and will
not earn a solid grade. You should discuss the material (that
each member contributes to) and come up with a cohesive
product that flows well and meets all requirements.
YOU MUST SUBMIT PEER Review statements IN CLASS or
Your grade will be drastically reduced if the review is NOT
received. The reviews should follow the guidelines of the peer
reviews that accompanied your previous group work.
A WELL DEVELOPED SUBMISSION should include the
following material/discussions:
I. Introduction./Description of the Firm (This section is mainly
devoted to facts about the firm to the “what”) its industry, its
market, its competitive position (in general) including but not
limited to the following: What kind of firm located where? i.e.
medium sized manufacturing firm in the Midwest. What are
their products/services or type of products/services? (what do
they sell?)
II. Analysis Section. (Bulk of paper. Develop discussions well.
Support your comments well – “So What”)
Buyer Power
Who are the firm’s buyers?
Describe buyer power (How powerful are buyers in this firm
and industry?)
How is firm currently using IT/IS to impact Buyer Power? Be
specific.
If not, how could they use IT/IS to impact Buyer Power? Or
additional ways. Be specific.
If you find no evidence of IT/IS use to impact Buyer Power,
then think of how they could What are the implications of this
use (or lack of use) of IT/IS?
How is this helping or hurting the firm?
Supplier Power
Who are the firm’s suppliers? Describe supplier power (How
powerful are suppliers in this firm and industry?)
How is the firm currently using IT/IS to impact Supplier

Power? Be specific If not, how could they use IT/IS to impact
Supplier Power?
Or additional ways. Be specific If you find no evidence of IT/IS
use to impact Supplier Power, then think of how they could
What are the implications of this use (or lack of use) of IT/IS?
How is this helping or hurting the firm?
FOX 5 Broadcasting Studio
MISSION CRITICAL FACILITY
7191 ENGINEER ROAD, SAN DIEGO, CA
Offering Memorandum
N O N - E N D O R S E M E N T
& D I S C L A I M E R N O T I C E
C O N F I D E N T I A L I T Y & D I S C L A I M E R
The information contained in the following Marketing Brochure
is proprietary and strictly confidential. It is intended to be
reviewed only by the party receiving it from
Marcus & Millichap and should not be made available to any
other person or entity without the written consent of Marcus &
Millichap. This Marketing Brochure has
been prepared to provide summary, unverified information to
prospective purchasers, and to establish only a preliminary level
of interest in the subject property. The
information contained herein is not a substitute for a thorough

due diligence investigation. Marcus & Millichap has not made
any investigation, and makes no warranty or
representation, with respect to the income or expenses for the
subject property, the future projected financial performance of
the property, the size and square footage of
the property and improvements, the presence or absence of
contaminating substances, PCB’s or asbestos, the compliance
with State and Federal regulations, the phys-
ical condition of the improvements thereon, or the financial
condition or business prospects of any tenant, or any tenant’s
plans or intentions to continue its occupancy
of the subject property. The information contained in this
Marketing Brochure has been obtained from sources we believe
to be reliable; however, Marcus & Millichap has
not verified, and will not verify, any of the information
contained herein, nor has Marcus & Millichap conducted any
investigation regarding these matters and makes no
warranty or representation whatsoever regarding the accuracy or
completeness of the information provided. All potential buyers
must take appropriate measures to verify
all of the information set forth herein. Marcus & Millichap is a
service mark of Marcus & Millichap Real Estate Investment
Services, Inc. © 2017 Marcus & Millichap. All
rights reserved.
N O N - E N D O R S E M E N T N OT I C E
Marcus & Millichap is not affiliated with, sponsored by, or
endorsed by any commercial tenant or lessee identified in this

marketing package. The presence of any corporation’s logo or
name is not intended to indicate or imply affiliation with, or
sponsorship or endorsement by, said corpora-
tion of Marcus & Millichap, its affiliates or subsidiaries, or any
agent, product, service, or commercial listing of Marcus &
Millichap, and is solely included for the purpose
of providing tenant lessee information about this listing to
prospective customers.
P R O P E R T Y S H O W I N G S S H A L L B E S U B J E
C T TO O W N E R D I S C R E T I O N A N D B Y A P P
O I N T M E N T O N LY.
P L E A S E C O N S U LT YO U R M A R C U S & M I L L
I C H A P A G E N T F O R M O R E D E TA I L S.
F O X 5
B r o a d c a s t i n g S t u d i o
M I S S I O N C R I T I C A L F A C I L I T Y
1 5 Y E A R N N N L E A S E D P R O P E R T Y
O F F I C E S N A T I O N W I D E A N D T H R O U G H O
U T C A N A D A
WWW.MARCUSMILLICHAP.COM
E X C L U S I V E LY O F F E R E D B Y
R I C K P U T T K A M M E R
Vice President Investments

San Diego
Office 858.373.3131
[email protected]
License CA 00664825
F O X 5 B R O A D C A S T I N G S T U D I O
S I N G L E T E N A N T
N E T L E A S E D P R O P E R T Y
01 11
06 20
E X E C U T I V E SUMMARY
S E C T I O N 1
Investment Overview • Investment Highlights
C O M PA R A B L E S A L E S
S E C T I O N 3
Sales Comparables • Sales Comparables Graph
P R O P E RT Y DESCRIPTION
S E C T I O N 2
Property Details • Pricing Details • Location Overview
MARKET OVERVIEW
S E C T I O N 4
Location Overview • Location Highlights • Demographics

TA B L E O F C O N T E N T S
EXCLUSIVELY LISTED BY:
F O X 5
B r o a d c a s t i n g S t u d i o
M I S S I O N C R I T I C A L F A C I L I T Y
1 5 Y E A R N N N L E A S E D P R O P E R T Y
This information has been secured from sources we believe to
be reliable, but we make no representations or warranties,
expressed or implied, as to the accuracy of the information.
References to square
footage or age are approximate. Buyer must verify the
information and bears all risk for any inaccuracies. Any
projections, opinions, assumptions or estimates used herein are
for example purposes only
and do not represent the current or future performance of the
property. Marcus & Millichap Real Estate Investment Services
is a service mark of Marcus & Millichap Real Estate Investment
Services, Inc. ©
2017 Marcus & Millichap ACT ID Z0000000
20+ YEARS
OPERATION HISTORY OF TENANT IN THIS BUILDING
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SUM M A RY
FOX 5 BROADCASTING STUDIO

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O F F E R I N G H I G H L I G H T S
7191 ENGINEER ROAD, SAN DIEGO, CA 92111
O F F E R I N G P R I C E
$10,020,000*
VITAL DATA
Price $10,020,000
Going In Cap Price 5.05%
Cap Rate Over Initial Term 5.95%
Price/SF $334.13
Gross Square Feet 29,988SF
Occupancy 100%
N E T L E A S E D S I N G L E T E N A N T I N V E S T M
E N T
G O I N G I N C A P R AT E
5.05%
C A P R AT E O V E R I N I T I A L T E R M
5.95%
M I S S I O N C R I T I C A L FA C I L I T Y

*Offering Price reflects owner’s obligation to contribute
$120,000 for “interior
refurbishment improvements” in 2025, discounted at a rate of
6%
M I S S I O N C R I T I C A L FA C I L I T Y
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I N V E S T M E N T O V E R V I E W
The purchase of 7191 Engineer Road provides an investor with
a stable cash flow for an extended
period of time (15 years) which assures that the owner will not
incur typical rollover costs, such as
downtime/vacancy, tenant improvements and leasing
commissions associated with other properties, in
the foreseeable future.
This investment also provides a hedge against historic inflation
rates, due to scheduled rent increases
every two years (5%). There is surety of rental income as the
corporate parent of the tenant is responsible
for these cash flows (Tribune Media Co.) has a market
capitalization of over $3.7B and currently has a B-1
credit rating by Moody’s.
Due to the NNN nature of the lease agreement, the daily
operating costs and capital expenses associated
with the ownership of this property will be little or none, as the
Tenant is responsible for all aspects of the
physical structure as well as any other costs associated with the
property.
This building is located in the central San Diego market of

Kearny
Mesa. The current occupancy rate in this market exceeds 96%
(CBRE – YE 2017 Kearny Mesa Overview) and buildings of this
size
and type have been leased or sold within 3.3 months of coming
to
market, on average, over the past five years (CoStar).
Due to the topography of this submarket, most of the local TV
stations are located in the Kearny Mesa area. The elevation of
this submarket allows communications logistics by providing
“line
of sight” transmission to tower antennas in other parts of the
County. This prompts the high demand for mission critical
facilities
and assures one of the highest occupancy rates for buildings of
this type in the County. Kearny Mesa is the center of the San
Diego metropolitan area and benefits from access to Highway
52
and Interstate 8 for east/west traffic circulation and Interstate 5,
Highway 805 and Highway 163 for north/south traffic
circulation.
THE PARENT COMPANY OF KSWB,
LLC IS TRIBUNE BROADCASTING
WHICH IS A WHOLLY OWNED
SUBSIDIARY OF TRIBUNE MEDIA
COMPANY (NYSE: TRCO)
► New 15 Year NNN Lease
► Credit Tenant- KSWB, LLC is a Wholly Owned Subsidiary
of Tribune Media Co.

$3.7B Market Cap
► Fixed, Periodic Rent Increases Provide Inflation Hedge
► Tenant is Responsible For All Aspects of Building,
Including Roof and Structure
► Highly Sought After Market in Central San Diego County
► 20 years of Occupancy History by the Current Tenant
► Extensive Tenant Improvements
► Special Permits Allowing Satellite Placement Are Difficult
to Replicate
I N V E S T M E N T
H I G H L I G H T S
1 MILE FROM THE
805, 163 AND 52 FREEWAYS
5 MILE EMPLOYEE
POPULATION OF 316,175
LESS THAN 3 MILES
FROM MONTGOMERY
FIELD AIRPORT

Services, Inc. ©
MARKET CAP VALUATION OF THE PARENT
COMPANY OF KSWB, LLC
$3.7 Billion
7
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DESCRIPTION
10
PROPERTY DETAILS / INVESTMENT OVERVIEW / RENT
SCHEDULE
FOX 5 SAN DIEGO

Property Address 7191 Engineer Road, San Diego, CA
Tenant
KSWB, LLC, a Delaware Limited
Liability Company
Number of Stories 2
Year Built/Renovated 1989/2017
GLA 29,988 SF
Type of Ownership Fee Simple
Utilities: Water Tenant Pays
Utilities: Electric / Gas Tenant Pays
Zoning IL-2-1
INVESTMENT OVERVIEW
Purchase Price $10,020,000*
Price Per SF $334.13
Going In NOI $505,505
Going In Cap Rate 5.05%
Avg. Cap Rate Over Initial Term 5.95%
Lease Type NNN
Rent Increases Fixed 5% Increases Every 2 Years

Lease Commencement April 1, 2018
Lease Term 15 Years
Options
Two (2) Five (5) Year At Prevailing
Market Rent
RENT SCHEDULE
4/1/2018-3/31/2020 $505,504 / Per Year
4/1/2020-3/31/2022 $530,780 / Per Year 5%
4/1/2022-3/31/2024 $557,319 / Per Year 5%
4/1/2024-3/31/2026 $585,185 / Per Year 5%
4/1/2026-3/31/2028 $614,444 / Per Year 5%
4/1/2028-3/31/2030 $645,166 / Per Year 5%
4/1/2030-3/31/2032 $677,424/ Per Year 5%
4/1/2032-3/31/2033 $711,296 / Per Year 5%
Option 1
4/1/2033-3/31/2038 FMV*
Option 2
4/1/2038-3/31/2043 FMV*

*Base Rent and Increases Determined Per Lease
*Offering Price reflects owner’s obligation to contribute
$120,000 for “interior
refurbishment improvements” in 2025, discounted at a rate of
6%
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209
125
163
805
56
52
52
15
94
5
5
8
8

15
15
5
Encinitas
Solana Beach
Del Mar
Torrey Pines
La Jolla
Ocean Beach
Point Loma
National City
Spring Valley
Pacific Beach
Mission Bay
Carmel Valley
Fairbanks
Ranch
Rancho
Santa Fe

Universal City
Miramar
Scripps Ranch
Poway
Carmel
Mountain
Ranch
Black
Mountain
Ranch
Rancho
Penasquitos
La Presa
Coronado
Mira Mesa
San Diego
FOX 5 San Diego
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T E N A N T P R O F I L E
KSWB, LLC is owned by Tribune Broadcasting, a subsidiary of
Tribune Media and affiliated
with Fox Broadcasting Company. On air for over 33 years and
associated with sister stations
KTLA (Los Angeles) and KTXL (Sacramento), Fox 5 is a top
rated television affiliate of the
Fox Broadcasting family, rated #1 in local morning news for 9
consecutive Nielsen Ratings
Books. Fox 5 also offers high quality sports and entertainment
to the extended media market
of San Diego County and Tijuana (approx. 5M viewers), on
digital TV channels 69.1 and cable
channels 705 and 5.
A R E A A M E N I T I T E S
► S u b j e c t P r o p e r t y
► N a t i o n a l U n i v e r s i t y
► M o n t g o m e r y - G i b b s E x e c u t i v e A i r p o r t
► C o s t c o / W a l m a r t / Ta r g e t / R E I
► S o l a r Tu r b i n e s
► C o u n t y o f S a n D i e g o
► K e a r n y M e s a A u t o M a r t
► K a i s e r P e r m a n e n t e M e d i c a l C e n t e r
► S a n D i e g o C i t y S c h o o l s
► C h i l d r e n ’s H o s p i t a l
► N o r t h r o p G r u m m a n

► F r e e w a y s 8 0 5 , 1 6 3 a n d 5 2
14
9,
18
8
A
D
T
204,871 A
D
T
112,4
16 A
DT
186,000 A
D
T
CLAIREMONT MESA BLVD - 40,134 ADT
BALBOA AVE - 54,947 ADT
McDonald’s
MONTGOMERY GIBBS
EXECUTIVE AIRPORT

SUBJECT
PROPERTY
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14
9,
18
8
A
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204,871 A
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112,4
16 A
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186,000 A
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CLAIREMONT MESA BLVD - 40,134 ADT

BALBOA AVE - 54,947 ADT
McDonald’s
MONTGOMERY GIBBS
EXECUTIVE AIRPORT
SUBJECT
PROPERTY
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Services, Inc. ©
TOP RATED
FOX TELEVISION NETWORK AFFILIATE IN THE
COUNTRY

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C O M PA R A B L E
PROPERTIES
1
S A L E S C O M PA R A B L E S
2 0 3 7 7 A C A C I A S T
Newport Beach, CA
S A L E S P R I C E $10,500,000
Close of Escrow 5/3/2018
RBA 25,918
Cap Rate 5.48%
Year Built 2003
The subject property was 50% leased to the seller at the time of
sale. BLD Brands
LLC is leasing back the property at $1.85/SF/Mo. for 10 years

on a triple net basis.
They may end up occupying the whole building. The property
contains no deferred
maintenance.
7 1 9 1 E N G I N E E R R O A D
San Diego, CA
S A L E S P R I C E $10,020,000
Close of Escrow —
RBA 29,988
Cap Rate 5.05%
Year Built 1989/2017
The subject property is leased to FOX 5 news San Diego, a
subsidiary of Tribune
Media company. Tribune Media company owns 42 TV stations
and is publicly held.
The property offers a 15 year NNN lease and provides rental
increases every 2
years. The property is on a 1.20 acre parcel just off of the 805
freeway.
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3 2 9 4 1 A LTO N P K WAY.
Irvine, CA
S A L E S P R I C E $7,400,000
RBA 21,813
Cap Rate 4.54%
Year Built 1974
This flex building sold as a leased multi-tenant asset. The
building is located on
a hard corner, within an industrial area. The building is
occupied by several video
production agencies .
4 1 8 1 O C E A N S I D E B LV D
Oceanside, CA
2
S A L E S P R I C E $9,200,000

RBA 14,319
Cap Rate 4.35%
Year Built 2011
Built in 2011, Walgreens has been under an absolute triple-net
(NNN) ground
lease since September 2010. The lease term is for 19 years and
has 10% rent
increases every ten years.
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S A L E S C O M PA R A B L E S
2 8 9 9 5 N E W P O R T R D
Menifee, CA
5
S A L E S P R I C E $9,000,000

RBA 17,185
Cap Rate 4.72%
Year Built 2016
The subject property is currently occupied by Rite Aid; they
have 20 years remain-
ing on their lease with (6) 5-year renewal options. The buyer
purchased this as
a triple net investment with plans for new construction on the
lot. The buyer was
doing 1031 exchange in this sale transaction.
4 4 9 3 3 PA R A M O U N T D R
San Diego, CA
S A L E S P R I C E $6,475,000
RBA 18,500
Cap Rate N/A
Year Built 2001
4933 Paramount Drive is situated in the same market as the
subject property.

The property is encumbered by a lease to Quake Global, a
hardware and software
products and solutions company. The two story office building
was purchased by
the adjacent building owner/user for future expansion.
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S A L E S C O M PA R A B L E S - A V E R A G E P R I C
E P E R S F
2941 Alton Pkwy
$339.25
28995 Newport Rd
$523.71
20377 Acacia St
$405.12
7191 Engineer Rd
$334.13
4933 Paramount Dr

$350.00
4181 Oceanside Blvd
$642.50
AV E R A G E : $ 4 0 1 . 7 3 P S F
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S A L E S C O M PA R A B L E S - A V E R A G E C A P R
AT E
7191 Engineer Rd 4933 Paramount Dr2941 Alton Pkwy
4.54%
28995 Newport Rd
4.72%
20377 Acacia St
5.48%5.05%
4181 Oceanside Blvd
4.35%
AV E R A G E : 4 . 8 7 % C A P

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S A L E S C O M PA R A B L E M A P
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Services, Inc. ©
96% MARKET OCCUPANCY
LOCATED IN SAN DIEGO’S MOST SOUGHT AFTER
R&D AND INDUSTRIAL MARKET (15,093,074 SF)
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M A R K E T
OVERVIEW
L O C AT I O N O V E R V I E W
S A N D I E G O , C A L I F O R N I A
With its warm, year-round climate, 50 miles of sun soaked
coastline
and world-famous attractions, San Diego is best known as a top
tourist
destination. Less well known is that this Southern California
metropolis
is also home to cutting-edge businesses for telecommunications,
biotechnology, software, electronics and other major innovation
industries.
The San Diego County unemployment rate decreased by 0.09%
though
July 2018 to 3.7%. This is the lowest rate of unemployment in

nearly
eleven years – since May 2007. The state rate decreased by
0.5% to
4.2%. The San Diego Metropolitan Statistical Area (MSA)
encompasses
the entire county of San Diego with its cities and
unincorporated areas.
The total civilian labor force stands at 2.2 million. Of that, 1.48
million
people are employed in nonfarm industries.
The various national, state and local government agencies are
the
largest employers in the county. For example, the University of
California
and the United States Navy each employ over 20,000 people
each.
However, San Diego has several prominent companies that
employ
thousands of employees each. The biggest companies to be
hospitals,
communications, and defense companies. San Diego continues
its
economic recovery that began in 2010.

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► #2 Safest City in the U.S.

► Top Local and Tourist Attractions
► 70 Miles of Coastline
► Proximity to Orange County and Los Angeles
► Hotspot for growing Tech companies
► World’s First Cross-border Airport Terminal
S A N D I E G O
C A L I F O R N I A
A M E R I C A’ S F I N E S T C I T Y
WORLD CLASS
BEACHES
GROWING
POPULATION
TOURIST
DESTINATION
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C I T Y O V E R V I E W
► San Diego is rated #1 in concentration of military and
defense assets in the world according to the San Diego
Military Advisory Council.
► According to Forbes in 2017 San Diego was rated the #1
best city to start a business.
► There were 2,740 new businesses established in 2018 YTD.

H I G H L I G H T S
I N N O VAT I O N
More than 60% of people who migrate here hold a college
degree Over 63,000 professionals in science and engineering
jobs 42% of degree holders have their first degree in a STEM
field 23.9% of the population are Multi-Lingual English-
Speaking. San Diego is ranked 2nd highest in millennial
degree holders in the Country (Source: ESRI 2017).
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► California is now the 5th largest economy in the world
► San Diego boosted 6.6% YOY growth in median home price
► 51% Service Sector employment in CaliBaja market (7.1M
population)
► 73.6M Northbound border crossings (2017) in San Diego
and Imperial Counties
► San Diego recorded $24.3B Foreign Exports (most current
data)
► 3.7% Unemployment in San Diego County (July 2018)
► 4.1% vacancy rate for industrial real estate (San Diego
County)
► 102,774 Businesses Operating in San Diego County (2017)
► Venture Capital increased 2X YOY in San Diego
E C O N O M Y

5
5
5
5
5
5
5
55
55
55
55
55
805
805
805
805
805
805

805
805
805
805
805
15
15
15
15
15
94
94
94
54
54
125
125
125

125
54
National City
Chula Vista
Logan Heights
Golden Hill
Midway District
Loma Portal
Point Loma Heights
Shelltown
South Park
Park West
Hillcrest
Mission HillsTemecula Heights
Ocean Beach
Sunset Cliffs
La Playa
Point Loma

Coronado Barrio Logan
Cherokee Point
Midtown
North Park
Balboa Park
East Village
Fairmont Village
El Cerrito
Ridgeview Webster
Oak Park
Emerald Hills
Encanto
Mt. Hope
Mountain View
San Diego
Paradise Valley
Cypress Glen
Divis
ion S

treet
Divis
ion S
treet
East 4
th Str
eet
East
8th
Stree
t
East
16th
Stre
et
E Str
eet
E Str
eet
D St
reet
2nd A
ve

2nd A
ve Hilltop D
rive
M
elrose A
ve
Otay Lakes Rd
Otay Lakes Rd
Coral Canyon Rd
3rd A
ve
3rd A
ve
4th A
ve
4th A
ve
5th A
ve
B
roadw
ay

B
roadw
ay
B
eyer B
lvd
B
eyer B
lvd
Beyer Blvd
P
icador B
lvd
P
icador B
lvd
B
roadw
ay
C St
reet

Sea V
ale St
G St
reet
H St
reet
Orange Ave
Anita St
Main St Main St
Palm Ave
Del Sol Blvd
Palm AvePalm Ave
Imperial Beach Blvd Coronado Ave Coronado Ave
Iris Ave
Camino De La Plaza
Grove Ave
Leon Ave
United States
Mexico
United States

Mexico
Tocayo Ave
Satellite Blvd
Main St
Otay Mesa Road Otay Mesa Road
Airway Rd
Siempre Viva Rd
Palomar St
Orange Ave
Oly
mp
ic P
kwy
Ol
ym
pic
Pk
wy Olympi
c Pkwy
Palo
mar

St
E R
iens
tra S
t
Palo
mar
St
P
al
om
ar
S
t
H St
reet
Napl
es S
t
9th S
t
13th S
t

13th S
t
27th S
t
S
aturn B
lvd
Napl
es S
t
Moss
St
H Street
H Str
eet
Proctor Valley Road
P
roctor Valley R
oad
H Street
Bo
nit

a R
d
Swee
twater
Rd
Cent
ral Av
e
N Rancho Del Ray Pkwy
Fili
pin
o A
me
rica
n H
wy
N R
anc
ho D
el R
ay P
kwy

P
as
eo
L
ad
er
a
O
le
an
de
r
H St
reet
J Str
eet
J Str
eet
J Str
eet
J Street
L Str
eet

L Str
eet
E Na
ples
St
F Str
eet
East
16th
Stre
et
National Avenue
National Avenue
E
uclid A
venue
E
uclid A
venue
E
uclid A
venue
S

32nd S
treet
S
31st S
treet
Silver Strand Blvd
S
ilver S
trand B
lvd
S
ilver S
trand B
lvd
S
28th S
treet
N Harbor Drive
Ro
se
cr
an

s
St
re
et
Ro
se
cr
an
s
St
re
et
Midway Drive
Sports Arena Drive
San Diego International Airport
San Diego Naval Supply Center
N
im
itz B
lvd
Voltaire Street
Narraganseit Avenue

Su
ns
et
C
liff
s
Bl
vd
Chats
worth
Blvd
C
ahon Street
C
abrillo M
em
orial D
rive
Barne
tt Ave
nue
Washington Street
University Avenue

University Avenue
Orange Avenue
El Cajon Blvd
R
ichm
ond S
treet
6th A
venue
25th A
venue
4th A
venue
5th A
venue
Pa
rk
B
lvd
Pe
rs
hi
ng

D
riv
e
F
ern S
treet
Upas Street
F
ront S
treet
Market Street
Ash Street
B Street
Market Street
Market Street
Ho
rri
s A
ve
nu
e
F

airm
ont A
venue
C
olum
bia S
treet
K
ettner B
lvd
Pacific H
ighw
ay
Pacific Highway
Ocean View Blvd
Commercial Street
Imperial Avenue
East
18th
Stree
t
East
24th

Stre
et
East
30th
Stre
et
Paradise
Valley Hospital
El Toyon Park
JFK
Park
Kimball
Park
Las
Palmas
Park
Bayside Park
Sweetwater
Marsh National
Wildlife Refuge
Chula Vista Bayfront Park
Scripps Mercy
Hospital Chula Vista

Eastlake Greens
Golf Course
San Diego National
Wildlife Refuge
Otay Lake
County Park
Otay Lake
Eucalyptus Park
Hilltop Park
Otay Valley Regional Park
Otay Valley Regional Park
San Diego Country Club
Egger Highlands
San Diego National
Wildlife Refuge
Glen Abbey Cemetery
San Diego Bay
San Diego Bay
San Diego Bay
Pacific Ocean

Alpha Street
East Plaza Blvd
Reo Drive
Skyline Drive
San Diego Co
ron
ad
o B
rid
ge
S Ba
y Fw
y
Telegraph Can
yon
Telegraph Canyon Tel
eg
rap
h
Ca
ny
on

Ota
y La
kes Road
Ota
y La
kes R
oad
O
tay Lakes R
oad
Hu
nte
P
kw
y
Birc
h R
d
Te
rra
No
va Dr
905

905
905
O
cean V
iew
H
ills P
kw
y
MAJOR AREA EMPLOYERS
University of California, San Diego
County of San Diego
United States Navy
San Diego Union High School District
Sharp Healthcare
Scripps Health
Qualcomm, Inc. $206.88
GROSS REGIONAL
PRODUCT
96.3%
EMPLOYMENT RATE

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D E M O G R A P H I C S H I G H L I G H T S

307,737
$71,961 130,355
POPULATION WITHIN 5-MILES
MEDIAN HOUSEHOLD INCOME HOUSEHOLDS WITHIN 5-
MILES
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DEMOGRAPHICS 1 MILE 3 MILES
Population 10,679 112,800
Households 4,011 42,577
Average Age 39.40 38.10
Median HH Income $71,961 $68,542
Daytime Employess 29,531 129,064
Population Growth ‘17-’22 5.6% 5.6%
Household Growth ‘17-’22 5.5% 5.5%
HOUSEHOLDS BY INCOME 1 MILE 3 MILES 5 MILES
2017 Total Population: 10,679 112,800 318,970
2022 Population: 11,275 119,106 336,446
Pop Growth 2017-2022: 5.58% 5.59% 5.48%
Average Age: 39.40 38.10 37.10
HOUSEHOLDS

2017 Total Households: 4,011 42,577 133,114
HH Growth 2017-2022 5.48% 5.47% 5.40%
Median Household Inc: $71,961 $68,542 $71,975
Avg Household Size: 2.60 2.60 2.30
2017 Avg HH Vehicles: 2.00 2.00 2.00
HOUSING
Median Home Value: $475,201 $468,919 $525,272
Median Year Built: 1966 1966 1974
PUBLIC TRANSPORTATION DRIVE DISTANCE
COMMUTER RAIL
Clairemont Dr./Morena Blvd. Commuter Rail
(Coaster)
6 Min 3.5 Mi
San Diego (Santa Fe Depot) Commuter Rail
(Train)
13 Min 9.2 Mi
AIRPORT
San Diego International Airport 16 Min 10.9 Mi
S A N D I E G O

California’s second largest city and the United States’ eighth
largest, San Diego boasts a citywide population of nearly 1.3
million residents and more than 3 million residents countywide.
Within its borders of 4,200 sq. miles, San Diego County
encompasses 18 incorporated cities and numerous other
charming neighborhoods and communities, including
downtown’s
historic Gaslamp Quarter, Little Italy, Coronado, La Jolla, Del
Mar, Carlsbad, Escondido, La Mesa, Hillcrest, Barrio Logan and
Chula Vista just to name a few.
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FOX 5 Broadcasting Studio
MISSION CRITICAL FACILITY
7191 ENGINEER ROAD, SAN DIEGO, CA
E X C L U S I V E LY O F F E R E D B Y
R I C K P U T T K A M M E R
Vice President Investments
San Diego
Office 858.373.3131
[email protected]
License CA 00664825
Fin 331
Homework 3
Due November 29, 2018
This assignment is 10% of your grade.
Review the offering memorandum for the Fox 5 Broadcasting

Studio as a real estate investment.
Your objective is to evaluate this investment opportunity to
determine the offering price based
on the assumptions provided in this prompt. You may complete
this assignment individually or
with one other classmate.
Please do not contact the listing agent.
• Use the spreadsheet provided to create your pro-forma
• Enter your responses in the cells that are shaded in blue for
grading.
• An extra worksheet is provided if you wish to use it for
intermediate calculations or
schedules.
• Be sure to enter you name(s) on the spreadsheet. If you work
with a partner, enter both
of your names.
• Submit only one spreadsheet for grading. If you work with a
partner, submit one
spreadsheet for grading. The other partner only needs to submit
a note with the name of
who submitted the spreadsheet to ensure getting a grade for this
assignment. Your name
MUST appear on the spreadsheet to receive credit for this
assignment.
• Name your spreadsheet “HW3 – Name 1, Name 2”

Assumptions:
• 5 year holding period
• Required IRR to Equity: 13.00%
• Financing:
o 5.00% Interest Rate
o 25 year amortization, monthly payments
o Debt Coverage Ratio of 1.20
o 1 Point Origination Fee
• $15,000 in other acquisition costs that are paid when the
property is acquired.
• Income is determined based on the lease and a closing of April
1, 2019
• The Owners will have the following annual costs:
o Reserves for Replacement $6,000 per year, constant
o Unreimbursed Costs of $12,000 per year, constant, for
accounting, legal, and
other partnership expenses that are not passed through to the
tenant.
• Disposition in Year 5
o Sale Price is estimated using the Net Operating Income for
year 6 and an exit cap
rate of 5.75%.
o Sale commission at the end of year 5 is 4% of the sale price.
o Other disposition costs are estimated at $25,000 for legal and
partnership closing
costs.
Requirements for analysis:

� Enter Your Name(s) in the spreadsheet where indicated
� Calculate the loan amount
� Calculate the Annual Debt Service each year for the 5 year
holding period
� Calculate the net sale proceeds with the foregoing
assumptions
� Forecast the Cash Flows Before Taxes including the net sale
proceeds
� Calculate the present value of the cash flows before taxes
� Calculate the offer price that will produce the required IRR to
equity
� Calculate the IRR if the investor pays the full list price
� Going IN Cap Rate
� Cash ON Cash for year 1
� Capital Multiplier
� Calculate Loan to Value
� What do you like about this investment opportunity?
� What concerns you about this investment opportunity?
� Identify one assumption that would improve the investment
performance.
Answer SheetRENT
SCHEDULEFinancingAcquisitionDisposition4/1/2018-
3/31/2020$505,504Rate5.00%Acquisition Costs$ 15,000Exit
Cap Rate5.75%4/1/2020-3/31/2022$530,780Term25Required
IRR13%Commissions4%4/1/2022-3/31/2024$557,319Debt
Coverage Ratio1.2OperationsOther Disp. Costs$
25,0004/1/2024-3/31/2026$585,185Points1Reserves$
6,0004/1/2026-3/31/2028$614,444Unreimbursed Costs$
12,0004/1/2028-3/31/2030$645,1664/1/2030-
3/31/2032$677,424Year01234564/1/2032-
3/31/2033$711,296Income$ 530,780.00$ 530,780.00$

530,780.00$ 557,319.00$ 557,319.00$ 585,185.00Reserves$
6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$ 6,000.00$
6,000.00Your Name(s)Unreimbursed Costs$ 12,000.00$
12,000.00$ 12,000.00$ 12,000.00$ 12,000.00$
12,000.00Going IN Cap RateNOICash ON CashADSCapital
MultiplierCFBTLTVIRR at List PriceSale
PriceCommissionsOther Disp. CostsLoan BalanceSale
ProceedsCFBTPV of CFBTCash Flows Before Taxes go in the
spaces above.Loan AmountPointsOther Acq. CostsOffer
PriceList PriceLoanPointsOther Acq. CostsInitial
InvestmentCash Flows Before Taxes go in the spaces
above.� What do you like about this investment
opportunity?Enter Repsonse Here� What concerns you
about this investment opportunity?Enter Repsonse Here�
Identify one assumption that would improve the investment
performance.Enter Repsonse Here
Enter Responses Here for the last 3 prompts.
Worksheet
Solution
RENT SCHEDULEFinancingAcquisitionDispostion4/1/2018-
3/31/2020$505,504Rate5%Acquisition Costs$15,000Exit Cap
Rate5.75%4/1/2020-3/31/2022$530,780Term25Required
IRR13%Commisions4%4/1/2022-3/31/2024$557,319Debt
Coverage Ratio1.2OperationsOther Disp. Costs$
25,0004/1/2024-3/31/2026$585,185Points1Reserves$
6,0004/1/2026-3/31/2028$614,444Unreimbursed Costs$
12,000Score0Out of 104/1/2028-3/31/2030$645,1664/1/2030-

3/31/2032$677,424Year0123456Grading4/1/2032-
3/31/2033$711,296Income$ 530,780.00$ 530,780.00$
530,780.00$ 557,319.00$ 557,319.00$
585,185.00ItemValuePointsReserves$ 6,000.00$ 6,000.00$
6,000.00$ 6,000.00$ 6,000.00$ 6,000.00NOI 1-620$
512,780.00$ 512,780.00$ 512,780.00$ 539,319.00$
539,319.00$ 567,185.00Your Name(s)0Unreimbursed Costs$
12,000.00$ 12,000.00$ 12,000.00$ 12,000.00$ 12,000.00$
12,000.00ADS20$ 427,316.67$ 427,316.67$ 427,316.67$
427,316.67$ 427,316.67$ - 0Going IN Cap Rate6.00%NOI$
512,780.00$ 512,780.00$ 512,780.00$ 539,319.00$
539,319.00$ 567,185.00CFBT20$ 85,463.33$ 85,463.33$
85,463.33$ 112,002.33$ 112,002.33$ - 0Cash ON
Cash3.38%ADS$ 427,316.67$ 427,316.67$ 427,316.67$
427,316.67$ 427,316.67Sale Price20$ 9,864,086.96Capital
Multiplier1.79CFBT0$ 85,463.33$ 85,463.33$ 85,463.33$
112,002.33$ 112,002.33Commission10$
394,563.48LTV71.3%Other Disp Costs10$ 25,000.00IRR at
List Price2.60%Sale Price$ 9,864,086.96Loan Balance20$
5,395,774.31Commissions$ 394,563.48Sale Proceeds20$
4,048,749.17Other Disp. Costs$ 25,000.00Total CFBT20$
85,463.33$ 85,463.33$ 85,463.33$ 112,002.33$
4,160,751.50$ - 0Loan Balance$ 5,395,774.31PV of
CFBT20$ (2,528,774.32)Sale Proceeds$ 4,048,749.17Loan
Amount20$ (6,091,400.76)Points10$ (60,914.01)CFBT$

85,463.33$ 85,463.33$ 85,463.33$ 112,002.33$
4,160,751.50Other Acq. Costs10$ (15,000.00)PV of CFBT$
2,528,774.32Offer Price30$ (8,544,261.07)Loan Amount$
6,091,400.76Initial Investment30$ (4,004,513.25)Points$
60,914.01Going IN Cap Rate206.00%Other Acq. Costs$
15,000.00Cash ON Cash203.38%Offer Price$
8,544,261.07Capital Multiplier10179.10%LTV1071.29%List
Price$ 10,020,000.00IRR at List Price202.60%Loan$
6,091,400.76What I Like1Points$ 60,914.01Concerns1Other
Acq. Costs$ 15,000.00How to Improve2Initial Investment$
(4,004,513.25)$ 85,463.33$ 85,463.33$ 85,463.33$
112,002.33$ 4,160,751.50Total Points400� What do you
like about this investment opportunity?Enter Repsonse
Here� What concerns you about this investment
opportunity?Enter Repsonse Here� Identify one assumption
that would improve the investment performance.Enter Repsonse
Here

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