A.CRE Case Study - Maplewood Plaza
Curious if anyone has gotten a chance to complete this case. They have been uploading some more stuff recently. I'm a bit stuck on this one though, mostly due to the MLA and lease Modelling. (Lev IRR -.036%) The case states "all tenants roll to market at lease expiration", and on the rent roll they all have "No" renewal options. In this case, are you still supposed to multiply the "75% renewal probability" to whatever they paid previously, as well as 25% to the market amount? otherwise, i am only taking 75% of the market rent, assuming they are 100% rolling to market, however only a 75% renewal probability at the market rent value, therefore applying a 25% discount to the market rent they should be paying at lease termination. this is significantly cutting my rental income figures and is a bit confusing, any clarity would be appreciated.
Maplewood Plaza: Value-Add Retail Case Study - Adventures in CRE
Also not quite understanding the partnership structure. how can you simultaneously have an LP 9% pref AND a 20% GP promote until the LP receives a 9% pref??? roast me
This looks like an error to me, should be a higher IRR% like 15% to get to second teir promotes.
right? the second bullet should say something along the lines of over 9% and up to __%
The renewal % is for calculating leasing commissions, downtime, TIs etc.
All tenants should roll to whatver the market rent is.
"No renewal options" simply means no Tenant's have a fixed-rate option or other clauses that prevent them from being charged market rent in this case.
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is that always the case? if the "all tenants roll to market" was not featured and a renewal option was present for each tenant, you would still calculate 75% of renewal rent/SF + 25% of market rent/SF correct?
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