Equations M1

Cap Rate

NOi / Value

Value from cap rate

NOI / Cap Rate

Terminal Value

(Final projection year - year NOI) / Terminal Cap rate

DCF Present Value

NPV(Discount rate, cash flows + terminal value final year)

Loan constant payment

pmt(rate/12, years 12, loan amount)12

Debt coverage ratio

NOI / loan constant payment

debt yield

noi / loan amount

breakeven occupancy

(operating expenses + taxes + reserves + constant payment) / income at full occupancy

unamortized balance at repayment

pv(interest rate, years remaining, constant payment)

LTV

(NOI / market cap rate) * LTV ratio

Loan to cost

LTC % * total development budget

Total development budget

Land + hard costs + soft costs

Debt coverage sizing

(Pro forma NOI / loan constant factor) / required debt coverage ratio

Debt yield sizing

NOI / (market cap rate ± 2-3%)

Return on equity

(NOI - loan constant payment) / cash equity invested

IRR

IRR(Cash flows)

Equity multiple

Total cash received / total cash invested

TI allowance

pmt(rate/12, lease term 12, ti amount)12

effective return on average balance

total fee / average outstanding loan balance

bank total return construction loan

interest rate spread over cost of funds / fee % on average balance