Financial Analysis

• Situation

  92,000 SF anchor tenant in a 180,000 SF center gave notice to ownership that the lease would not be renewed. Anchor is on a NNN structure at $6.75 psf. A prospective tenant is interested in occupying 62,000 SF of this soon-to-be vacated space. The prospective tenant would pay $14.00 psf on a gross structure. Ownership would pay $105 psf in TI.

• Task

  • Create a 3-year cash flow for 2024 -2026

  • Analyze the value of the potential tenant under a new lease structure and TI package

  • Calculate the loan balance at the end of the 12-month "Actual to Budget" (provided source file)

  • Consider the capital events in 2024 and 2025; make high-level business plan recommendations

• Action

  First 12 months cash flow were given. In light of a 2027 loan maturity, a 3-year hold analysis (month 13-48) was performed with the following assumptions:

  • Capital events: Sale at end of 2026 (month 36), loan payoff at time of sale. 6 month lease-up period for the 62,000 SF space (month 19)

• Result

  Ownership executed the lease on 62,000 SF of the space, demising to eventually lease the remaining 30,000 SF.