Angus Cartwright III Case Study v2 Essay

In Exhibit 2 we find the first-year project setups. This is important information because we can see how much each real estate property will cost in the first year. This information is also useful in setting up the projected cash flow analysis for each of the four properties. Alison Green had the greatest before tax cash flow with $434,306.53, Ivy Terrace came in second with before tax cash flows of 336,130.99, 900 Stony Walk came in third

After analysis of Mr. Alexander’s proposal, it is obvious why he should take advantage of a real estate investment opportunity. The experience he would gain coupled with the added income would establish a solid foundation for making more investments in the future. To this end, however, I find Alexander’s plan for the Revere Street property falls short. A major deficiency is that his projections are almost entirely predicated on estimates and assumptions that are neither conservative nor reliable. In a similar vein, Alexander’s “DIY” approach is not only exemplar of naiveté, but also suggestive of many implications that were overlooked in his proposal. And, even more discouraging, a best-case scenario analysis reveals that even without

Also, the client will be extinguishing his savings with the purchase of this property and would not have the funds necessary to facilitate a major fix to the building, given that occurrence (ie., roof, HVAC, etc.). A reserve of 5% of the buildings value is the industry standard.

(6) Determination of the appropriateness of this particular property for Alexander’s personal needs. Should Alexander make this investment?

Given certain indicators of slow market growth and the high purchase price being advertised by the seller, this is most likely a bad investment for Laflin and his investors. While employment growth may be on the rise, the lack of speculative construction is troubling as this implies the market is not expecting an increased demand. In any case, when considering the expiration of the current tenants’ above market rents and the unfortunately low current market rents, Laflin would still need a great deal of growth in addition to a lower negotiated price to make this investment profitable.

1. Which firms are the “identical twins” of the Collinsville investment? Using the β’s for those assets and the methodology learned in this course, determines the appropriate discount rate for the Collinsville investment.

For all of these reasons, I believe that rent control should be abandoned in New

• “We believe the new rent is very reasonable and below the market value”; and

Founded in 2001, Yorktown Technologies, Inc. is a company that specializes in the ornamental fish industry. The globalization of the ornamental fish industry happened over a half a century ago. Hundreds of freshwater and saltwater fish can be purchased as pets in virtually any industrialized nation in the world (Broy, 2011). Yorktown Technologies commercializes a genetically modified fish called GloFish, which appear to glow in the dark (Mueller, 2010). GloFish are zebrafish that have been genetically modified with fluorescent colors. They are the first genetically modified animals to become publicly available as pets

1. How might one characterize or describe the architectural paint coatings industry and Jones Blair’s trade area?

When we look at 75% occupancy, the rate of return (net earnings divided by amount invested) is $298,000/$3,525,000 = 8.4%. . This return should be regarded as low; as the

Undoubtedly their will be ups and downs but the long term average of 9% appears to be reasonable and stable for planning purposes. Since this

That for almost all cases below 50% probability of lease being granted we are better of not exercising the option to buy the development, and,

The break-even analysis helps us understand the minimum operating levels of the property before the bottomline is affected. The break-even occupancy is sustainable according to the estimated rates. Alison Green has the lowest break-even point at 64.84%. Ivy Terrace, the other apartment building, is 67.07%. Stony Walk and the Fowler Building, the two office complexes, are at 76% and 85.92%, respectively. This puts the highest risk of uncertainty and their effect on the returns to the office buildings. The cash flow projects for the 10 year holding period helps us understand the IRR and NPV of the project. When looking at the IRR we have to keep in mind that it assumes the cash flows will be re-invested at the IRR. Interest rates fluctuate over time, so this is an unrealistic assumption. Thus, the NPV analysis is the best projection for these properties. Page | 6

Looking back over the past ten years and most especially the past three years for investment returns and economic possibilities, there seems to be more growth in the past 24 months than what we have seen in over a decade. The rapidly changing international economic climate and the current government struggles with tax based polices and the continued climbing US