Analysis
After reviewing the underwriting of each of the six loans in the CMBS deal, we have seen that in South Plains Mall which has net operating income greater than all and current occupancy rate of 84.8% contains highest underwritten net operating income, with the occupancy rate slightly improving to 89.6% form previous 84.8%. That created around 2.71% of underwritten DSCR and 8.2% underwritten capitalization rate, having whole loan interest rate of 6.293%.
On the other hand, we have seen that in Four New York Plaza, net operating income of which was not given, had current occupancy rate of 74.9%, with the occupancy rate not even changing from 74.9%. That created around 1.38% of underwritten DSCR and 6.9% underwritten capitalization rate, and 9.89% whole loan interest rate.
Similarly, we have seen that in CCPT Retail Portfolio I, net operating income of which was over $6 million, had current occupancy rate of 100%, with the occupancy rate decreasing from 100% to 96.1%. That created around 2.73% of underwritten DSCR and 8.4% underwritten capitalization rate and 7.312% whole loan interest rate.
On the other hand, we have seen that in CCPT Retail Portfolio III, which had current occupancy rate of 100%, which was then reduced to 96.4% and has around 2.71% of underwritten DSCR and 7.6% underwritten capitalization rate. The whole loan interest rate was 5.477%.
If we have a look at DDRM Retail Portfolio, had current occupancy rate of 95.7% and changed to 91.2%. That created around 2.34% of underwritten DSCR, 8.4% underwritten capitalization rate with whole loan interest rate of 4.214%.
On the other hand, we have seen that in Bank of America Plaza, it had current occupancy rate of 93.8%, which changed to 92.1%. That created around 3.4% of underwritten DSCR, 12.3% underwritten capitalization rate and whole loan interest rate of 4.278%.
After analyzing all above investment opportunities, South Plains Mall have generated good net operating income among all and have also increased its occupancy rate but on the other side of the mirror, Four New York Plaza will cause highest whole loan interest rate in the future, so the investment in Four New York Plaza will be most risky.
Upon analysis of generation of net cash flows of different investment opportunities, South Plains Mall is better among all other investment opportunities. Because of high net cash flows generation ability, this should be the first option to invest in $5.8 million...........................
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