Retail Vacancies in Manhattan
https://www.nytimes.com/2017/03/07/realestate/commercial/for-lease-vacant-storefronts-manhattan.html?_r=0
Own vs. Rent, Effects in Multifamily Prices
http://nreionline.com/multifamily/how-price-owning-vs-renting-affecting-multifamily-market
Commercial Real Estate Cycle
http://www.businessinsider.com/commercial-real-estate-market-to-peak-in-2017-morgan-stanley-says-2017-3
- What are some drivers of demand for hotel/motel property?(Bullet points are fine.)
- What are some reasons that a corporation may choose to lease instead of own commercial real estate? (Bullet points are fine.)
- Retail vacancies in Manhattan are on the rise.Based on the reading,what are some drivers of the demand for retail space in this market?(Bullet points are fine.)
- According to the reading on the commercial real estate market,Morgan Stanley analysts expect the bull market in CRE to end soon. Do you agree or disagree with their analysis? Discuss (3-4 sentences max., defend your opinion using facts from the article, other research)
Calculation parts.
2.You are deciding whether to own or rent a single family residence. You could rent the property for $2,000 a month, or you could buy the property for $200,000 and finance it with a 85% LTV fixed-rate fully amortizing 30 year mortgage at 4%. You expect an annual appreciation rate of 3%, maintenance and insurance at currently $1,200/year and increase by 2% a year, you have a 28% marginal tax rate, and plan to live in the property forfiveyears.Selling costs would be 6.5% of the sale price and property taxes are 1.5% of current property value.
What IRR would you earn based on this 5 year holding period? (Express your answer as a percentage and round to 2 decimal places. If your answer is ten and a half percent, enter 10.50)
3. You purchased a property 4 years ago for $275,000 using a 75% LTV mortgage. The mortgage was a 15 year fully amortizing FRM with a 3.8% rate. Property values in your area have declined and now the property is worth $235,000. What is your current loan to value ratio?
4. You purchased a property4years ago for$275,000using a75%LTV mortgage.The mortgage was a15year fullyamortizing FRM witha3.8%rate.Propertyvalues in your area have increasedand now your propertyis worth$320,000.You would like to do a cash-out refinance to take out some equity. A lender is willing to give you a cash-outrefiwith a 80% LTV. If you decide to take this offer, how much equity will you get to keep as cash? Express your answer as a dollar amount rounded to the nearest cent.
5. You are deciding whether to own or rent a single family residence. You could rent the property for $3,100 a month, or you could buy the property for $550,000 and finance it with a 70% LTV fixed-rate fully amortizing 30 year mortgage at 4%. You expect an annual appreciation rate of 3%, maintenance and insurance at currently $2,500/year and increase by 2% a year, you have a 33% marginal tax rate Selling costs would be 7% of the sale price and property taxes are 2% of current property value.
How many years would you need to own this property in order to generate a positive IRR? (Round to the nearest year)