Legends Edge Development Returns Analysis PHASE ONE

Legends Edge, Verona, WI Project Returns Analysis

Sources and Uses of Funds

Total

Capital Stack

Amount

% of Project

Boutique Hotels Construction (all-in)

$67,500,000 $70,000,000

Debt

$103,375,000 $12,600,000 $7,407,750 $14,117,250 $34,125,000 $137,500,000

75.2%

Executive Residences Construction (all-in, incl. garage)

Developer Land Operator Equity

Closing Costs

$0 $0 $0 $0 $0

Rate Cap

Other Equity Total Equity Total Sources b/c (should be $0)

Mortgage Broker Fee Working Capital Interest Reserve Total Use of Funds

24.8%

100.00%

$0

$137,500,000

Equity $

Equity %

Distr. Equity %

Number of Boutique Hotel Rooms Number of Executive Residences Total Structured Parking Spaces

300 272

Developer Land Operator Equity

$12,600,000 $7,407,750 $14,117,250 $34,125,000

36.9% 21.7% 41.4% 100.0%

36.9% 21.7% 41.4% 100.0%

1,118

Other Equity Total Equity

First Mortgage

Executive Residences

Boutique Hotels

Mortgage Amount

$43,875,000

$59,500,000

Interest Rate

4.50%

4.80%

Amortization Period Loan Start Date

25

40

1/1/20

1/1/20

2020 Year 1

2021 Year 2

2022 Year 3

2023 Year 4

2024 Year 5

Beginning Balance Annual Payment

$103,375,000 $6,275,306 $4,799,502 $1,475,804 $101,899,196

$101,899,196 $100,354,016

$98,736,197 $6,275,306 $4,581,429 $1,693,878 $97,042,319

$97,042,319 $6,275,306 $4,501,791 $1,773,515 $95,268,804

$6,275,306 $4,730,127 $1,545,180

$6,275,306 $4,657,487 $1,617,819 $98,736,197

Interest Principal

Ending Balance b/c (should be $0)

$100,354,016

$0

Year 1

Year 2

Year 3

Year 4

Year 5

Yearly Cash Flow Summary

Net Operating Income - Boutique Hotels Net Operating Income - Executive Residences

$4,917,786 $4,738,618 $6,275,306 $3,381,098 $1,475,804

$7,131,438 $4,923,834 $6,275,306 $5,779,965 $3,020,984

$8,756,027 $5,241,787 $6,275,306 $7,722,508 $4,638,803

$9,085,680 $5,377,979 $6,275,306 $8,188,352 $6,332,681

$9,305,651 $5,679,634 $6,275,306 $8,709,979 $8,106,196

First Mortgage Annual Payment

Operational Cash Flow Principal Reduction

Debt Coverage

1.54 9.3% 9.9%

1.92

2.23

2.30

2.39

Debt Yield

11.7% 16.9%

13.5% 22.6%

14.0% 24.0%

14.5% 25.5%

Cash on Cash Return

Executive Residences

Boutique Hotels

Total Project

Project Residual Calculation Fifth Year Net Operating Income

$9,305,651

$5,679,634

Terminal Cap Rate Gross Sales Price Selling Costs Net Sales Price

8.0%

7.0%

$116,320,640

$81,137,630

1.25%

1.25%

$114,866,632

$80,123,409

Plus: Interest Reserve Total Proceeds at Closing

$0

$0

$114,866,632

$80,123,409

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