Introduction:

In this report, we have discussed whether Fleet Bank should finance the loan to JPI Multifamily Inc. or not. The loan is of 15,715,000 dollars and is for the financing of a 390 unit apartment project in Texas. We have taken into consideration the background and previous financial performance of JPI Multifamily Inc. It shows that the company has a very good record and is considered as one of the best as it was the only company that survived the real estate crisis. The company is also highly liquid and has cash reserves as well, which shows its ability to pay back the loan. In addition to the analysis of the company, the market conditions, competitors present in the market and other important factors like population, occupancy rate and the targeted market is analyzed. The location of the project is, as mentioned above, Austin, Texas. The location is a good one considering that the population in Austin is expected to increase, the occupancy level is also expected to reach 98.8% in the following year. Additionally, there are many high-tech companies present in Texas such as Apple computers, 3M, and Abbot Laboratories. This also increases the employment there and in result directly increasing the occupancy rate. Austin has also been awarded a number of awards recently which includes the likes of sixth best place for manufacturing companies. Moving onto its competitors i.e. other apartments in the same area and nearby, it can be seen that the comparable offer up to 2 bedroom apartments, whereas, Creek also offers a three bedroom apartment. Additionally, the price of the Creek apartment is very reasonable considering the prices of its comparable.

Our sensitivity analysis shows that for the project to be successful, the company needs to sell at least 167 units to remain profitable.

Taking the above considerations into account, it is recommended to the Fleet Bank to finance the loan to JPI Multifamily Inc.

The Millegan Creek Apartments Harvard Case Solution & Analysis

Introduction

This report revolves around the case study “The Millegan Creek Apartments” in which, Fleet Bank is considering to issue a loan to a constructing company that is planning to construct three hundred and ninety units of apartments in Texas. In this report, we have analyzed the important metrics and suggested Fleet whether he should go for this loan or not. Secondly, considering the location, the project, and the competition in the market, it is further analyzedwhether the project can become a success for Fleet Bank or not. In addition to that, other factors that are considered includes the demand in the market, the ability of JPI, Inc. to pay back the loan and its previous financial record. Moreover, sensitivity analysis is done in order to estimate the profit for the developer considering the best, worst and medium case.

The Millegan Creek Apartment is a case based on acommercial loan. The parties involved in this commercial loan are, as mentioned above, Fleet Bank and JPI Multifamily Inc. The real estate department of the bank wants to evaluate whether they should be accepting the loan proposal of JPI Multifamily Inc. of 390 units of apartments or not. An overview of each of the party is done below...................

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