Holt Lunsford Commercial
Going in Cap Rate assuming no Vacancy no Collection Losses
• It is expected that there is no vacancy and collection losses and taking the benefits upon lease and buying decision for HCL going in cap rate for the company is calculated.
• Net benefits are divided by initial purchase price of the warehouse.
Quantitative Analysis of Colony Crossing
• It will provide a building according to own specification.
• Useful life of the warehouse will be greater in this scenario as compared to buying existing building.
• It is expected that under this option there will be no need of roof repairmen.
• It could provide an advantage by providing control over core business processes and will reduce the risk by providing immediate control.
Sensitivity Analysis of Colony Crossing
• For sensitivity analysis certain assumption has been taken.
• It is expected that construction cost will increase to 40 dollars per square foot.
• Required land will be 440000 square feet with 25% coverage.
• Increase in construction cost increases the amount of debt.
• Under increased level of construction cost there is a minor change in the internal rate of return.....................
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