Real Estate Tax Helsinki by lef11755

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More Info
									Data Sources
http://www.emporis.com/en/cd/cm/?id=103590
http://www.mrofficespace.com/spframes/search_set.html

Name of Building                                           Woolworth Building
Nickname(s)                             Cathedral of Commerce and Queen of Manhattan
Street Address                          233 Broadway (Building takes up several lots; actual
                                        address is 227-37 Broadway)
Cross Street                                     Between Barclay Street and Park Place
ZipCode                                                          10007-2907
Census Tract/Block                                                  21.00/1
Legal Block                                                           123
Legal Lot                                                              22
APN                                                               0123-0022
Map Reference                                                     0123/0123
Landmark Status                                                City and Federal
Market                                          Downtown: City Hall/Insurance submarket
Subway Directions to Site               1) N, R at City Hall, 2) 2/3 to Park Place, or 3) A/C to
                                        Chambers
Why Built                               To serve as Woolworth's world headquarters following its
                                        consolidation with the last of its competitors.
Year Built                                                           1913
Gross Building Area (Square Feet)                                  988,000
Loss Factor                             Loss factor average is 22%; varies from floor to floor.
                                        Higher loss factor for upper floors.
Land Area                                      151x197 irregular (29,747 sqft or .68 acres)
  Lot Width (feet)                                                    151
  Lot Depth (feet)                                                    197
Building
  Building Width (feet)                                             149
  Building Depth (feet)                                             196
Ground Lease                                      None; Owner owns land and building
Zoning                                                           C5-3 CR
Height                                                           792 Feet
Floors (OG OverGround)                            57 floors plus three basement levels
Floor Sizes (Note: *Floors 29, 42 and                     (2-3rd Floor) 34,000 sf
48 are mechanical. Floors two and                         (4-5th Floor) 34,000 sf
three are part of an atrium)                             (6-28th Floor) 28,000 sf
                                                         (30-41st Floor) 6,900 sf
                                                         (43-47th Floor) 4,500 sf
                                                        (49-53rd Floor) 2,000 sf
Elevators (Floor/Number of Elevators                24 passenger, 2 freight elevators.
Serving Floor)                                              4-10 (4 elevators)
                                                            11-18 (7 elevators)
                                                            19-27 (7 elevators)
                                                            28-40 (2 elevators)
                                                            28-47 (2 elevators)
Structure                               Steel; The structure41-54 (2 elevators)
                                                             is covered in polychromed terra-
                                        cotta blocks, considered one of the most durable building
                                        materials due to its impervious vitreous glazing.
Ceiling Heights                                     Varies from eleven to twenty feet
Interior/Exterior                     The interior as well as the exterior of the building carries
                                      the Gothic theme throughout, including every corridor
                                      with their polished terrazzo floors, Italian marble,
                                      wainscoting, and gilded ornamental work.
Office Class Type                     Most rate it a Class A although Cushman Wakefield rates
                                      it a Class B;
Year (initial construction started)                               1910
Year (construction finished)                                      1913
Year (last reconstruction)                                        2000
Type of construction                                       high-rise building
Style                                                          neo-gothic
Tax Information
  Land Value                                                   $9,504,000
  Improvement Value                                           $27,174,000
  Total Assessed Value                                        $36,678,000
  Property Tax                                               $3,174,293.45
  Assessed Year                                                   2004
  Tax Year                                                        2004
  Tax Area                                                          4

Current Owner                         The Witkoff Group (233 Broadway Owners LLC/Witkoff
                                      Steven C)
Architect                                                     Cass Gilbert
Construction company                                   Thompson-Starrett & Co.
Structural engineering                                        Gunvald Aus
Elevator supplier                                        Otis Elevator Company
Facade supplier                                      Atlantic Terra Cotta Company
Number of Tenants                                approximately 100 corporate tenants
Major Tenants                         1) Securities and Exchange Commission (140,000 sqft),
                                      2) New York University’s School of Continuing and
                                      Professional Studies (94,000 sqft) 3)Fallon McElligott,
                                      an advertising agency (60,000 sqft)
Building Services                     Freight Entrance, Emergency Generator 275 KVA, 24
                                      Hour Coverage, Building Attendant, Security Service, 24
                                      Hour Access to Building
Prior Sales History                   F.W. Woolworth: instead of taking a mortgage, he
                                      preferred paying the $13.5 million in cash in 1910. The
                                      Witkoff Group acquired the Woolworth Building in 1998
                                      for $126.5 million after having successfully reduced its
                                      original - and accepted - bid of $157 million. The seller
                                      was Venator Group, the successor to the old Woolworth
                                      Corporation. Cushman and Wakefield plans to list
                                      building in $400 million range (May 2004).
Last Market Sale Information
  Recording Date                                            1/28/1999
  Sale Date                                                 1/28/1999
  Sale Price                                              $126,500,000
  Sale Type                                                    Full
  Document Number                                           2808-243
 Lender                                             Lehman Brothers Holdings Inc
Seller Name              233 Broadway Inc John H Cannon
First Mortgage Amount               $56,135,706
Second Mortgage Amount              $75,000,000
Multi/Split Sale                      Multiple
Deed Type                     Bargain and Sale Deed
What Purchased           Land, Building, and Improvements
         Mortgage Mortgage
History Recording Document                                     Loan      Mortgage    Mortgage
Record #    Date    Number              Lender                Amount     Loan Type Rate Type
   1      4/9/2003   82787   Column Financial               $13,939,322 Conventional   Fixed
   2     8/30/2000 3152-1811 Lehman Brothers Holdings Inc   $30,000,000 Conventional
   3     1/28/1999           Lehman Brothers Holdings Inc   $56,135,706
   3     1/28/1999                                          $75,000,000

Source: www.realquest.com
Available Space (as of May 31, 2004) for 233 Broadway
    Floor     Suite      Sq Ft    Rent       Avail        Term          Elec/       Min/      Last
                                   psf                     Yrs          type        Max      Update
     5th    Full Floor   32,076            6/1/2002     July 2005                          May 11 2004



     7th       702       1,945              4/1/2002                                   April 21 2004
     7th       711       1,530              4/1/2002                                   April 21 2004
     7th       775       2,139    24.00     4/1/2002                                   April 21 2004
     7th       780       2,484    26.50     4/1/2002                                   April 21 2004
    8th        807       1,442    24.00   Immediately  5 years                         May 21 2004
    8th        810       2,515    26.50     4/1/2002                                   May 21 2004
     9th       901       2,238    24.00     6/1/2001                                   April 21 2004
     9th       912        790     24.00     6/1/2001                                   April 21 2004
     9th       920                26.50     4/1/2002                                   April 21 2004
    18th    Full Floor   10,549   34.00     Arranged 10-15 years                2,000/ May 21 2004
                                                                                10,549
     21st   Full Floor   28,098           8/1/2003      Apr 2010    submeter/0%        May 27 2004
    22nd                  5,836   32.00 Immediately                                    May 21 2004
    22nd      2201        1,805   32.00   3/1/2003                                     April 21 2004
    22nd      2203        1,450   32.00   3/1/2003                                     April 21 2004
    22nd      2204        1,250   32.00   3/1/2003                                     April 21 2004
    22nd      2206        3,033   32.00   3/1/2003                                     April 21 2004
    22nd      2207         467    32.00   3/1/2003        TBD                          April 21 2004
    22nd      2208        5,390   32.00   3/1/2003                                     April 21 2004
    22nd      2209        2,291   32.00   3/1/2003                                     April 21 2004
    22nd      2210        6,217   32.00   3/1/2003                                     April 21 2004
    23rd    Full Floor   28,098           4/1/2004      Sep 2011    submeter/0%        May 27 2004


    24th    Full Floor   28,098            4/1/2004     Sep 2011    submeter/0%            May 27 2004


    27th                 10,507   39.00    6/1/2002     10 years                           April 21 2004
    31st      3100        3,400   34.00    4/1/2002                                        April 21 2004
    46st                  4,456   34.00    4/1/2002                                        April 21 2004


      Note: According to Proctor Wong at Newmark, rent on lower floors on average are $26 per square foot and on upper flo

Sources:
http://www.mrofficespace.com/spframes/search_set.html
http://www.tenantwise.com/

Legend
TBD: To be determined
              Direct or
                Sublet                                   Comments
             Office Sublet Rent is negotiable. Above standard installation, furniture and
                           phones available, category 5 cabling, rolling "space saver" files,
                           keypad access, hand reader, local alarm and closed circuit
                           television.
             Office Direct Pre-built open plan
             Office Direct 1 office & 5 workstations.
             Office Direct
             Office Direct 4 offices, conference, storage & reception.
             Office Direct 1 office and open area.
             Office Direct 5 offices and bull pen.
             Office Direct
             Office Direct
             Office Direct 4 offices & open area.
             Office Direct Law installation. New building installation (can be divided into units
                           of 2,000 sq. ft. and up).
             Office Sublet Rent is negotiable. Furniture available.
             Office Direct Above standard executive office installation.
             Office Direct
             Office Direct
             Office Direct
             Office Direct
             Office Direct
             Office Direct
             Office Direct Large open area.
             Office Direct Large open area.
             Office Sublet Rent upon request. New installation. Outstanding views. Open plan
                           layout. Full kitchen and pantries throughout, furniture, phones and
                           audio visual equipment available.
             Office Sublet Rent upon request. New installation. Outstanding views. Open plan
                           layout. Full kitchen and pantries throughout, furniture, phones and
                           audio visual equipment available.
             Office Direct Move-in condition. Reception.
             Office Direct 8 offices, reception & storage.
             Office Direct 8 offices & conference/open area


r square foot and on upper floors are $32 per square foot
Barron's/John B. Levy & Co. National Mortgage Survey
Selected CMBS Spreads: 2004Q1
(in basis points, or hundredths of a percentage point)
                                      To 10-year       U.S. Treasuries
Rating                                 5/10/2004          4/5/2004
AAA                                      81-82              69-70
AA                                       89-90              76-77
A                                        97-98              83-85
BBB                                     126-131            115-120
BB                                      375-395            390-400

                                 10-year Treasury
Interest Rate (on 6/2004)              4.71%

Office-Central Business District (National Statistics except where noted) 2nd Quarter, 2004 Investor Survey

                                       Average             Maximum          Minimum
Debt Coverage Ratio                      1.68                 1.90            1.45
Interest Rate                           7.27%                8.95%           5.58%
Amortization (years)                      25                   20              30
Loan to Value Ratio (LTVR)               60%                  50%             70%
Cash on Cash                           11.76%               15.80%           8.45%


Lehman Brothers: Example of Commercial Mortgage Terms
In case you are interested, here is some information on commercial mortgage financing from Lehman Brothers, the
company that financed the Witkoff Group's purchase and also renovation of 233 Broadway.
(Source: http://www.lehmanbank.com/commercialRealEstateLending.do)

Lehman Bank and other Lehman Brothers companies offer a variety of loan products for the acquisition or refinancing
of various types of commercial real estate, including: office, retail, multifamily, hotel and industrial properties. Loans
include:

1) Conduit mortgage loans which are generally fixed rate with 5 to 10 year terms and
schedules. These mortgage loans range from $2 million to $50 million in size with 70% to
related property type.

2) Mortgage loans which typically range from $50 million and greater and can be either fixed rate or floating rate.
These mortgage loans are generally sized at 40%-65% LTV depending on the related property type.

3) Mezzanine loans which generally range from $5 million to $100 million with a maximum term of
95% LTV including the senior mortgage loan.

Syndicated real estate bank loans which are either secured by real estate and/or other assets or are otherwise
unsecured. Both secured and unsecured syndicated real estate bank loans are structured with full recourse and
borrower covenants. These facilities typically are greater than $100 million in size, are floating rate and have maturities
of 3 to 5 years.
              Whole Loans (Interest rates)
                                                    Prime          Prime           Prime
                                                 Mtge. Range       Mtge.       Mtge. Range
              Term of Loan                        5/10/2004         Rate         4/5/2004
              5 years                            5.04 - 5.14%      5.09%        4.30 - 4.4%
              7 years                             5.40 - 5.50       5.45        4.75 - 4.85
              10 years                            5.89 - 5.99       5.94        5.25 - 5.35
              For loans of $5 million and up, on amortization schedules of 25-30 years,
              that can be funded in 60-120 days, with 0-1 point.




oted) 2nd Quarter, 2004 Investor Survey


              RealtyRates.com
              RealtyRates.com
              RealtyRates.com
              RealtyRates.com
              RealtyRates.com


gage Terms
tgage financing from Lehman Brothers, the
         Broadway.


oan products for the acquisition or refinancing
amily, hotel and industrial properties. Loans


           and 25 to 30 year amortization
            70% to 80% LTV depending on the


and can be either fixed rate or floating rate.
on the related property type.

n with a maximum term of 3 years and up to


 e and/or other assets or are otherwise
ans are structured with full recourse and
on in size, are floating rate and have maturities
New York Real Estate

              Mar-04                Downtown        Midtown South       Midtown      Manhattan
Rentable Square Feet                54,224,079        14,054,244      150,392,309    218,670,632
                                    31,931,370        50,779,638       71,890,570    154,601,578
                                     5,038,360        33,297,267       24,125,958     62,461,585
                                    91,193,809        98,131,149      246,408,837    435,733,795

Annual Average asking rents (psf)     $33.89            $28.38          $54.05         $46.87
                                      $28.53            $31.08          $38.11         $33.87
                                      $25.43            $28.16          $23.30         $26.38
                                      $31.45            $29.76          $45.34         $38.46

Overall Vacancy (sqft)               7,258,858          772,512       15,121,459     23,152,829
                                     4,954,964         6,475,957      10,465,253     21,896,174
                                      551,293          4,693,511       2,539,143      7,783,947
                                    12,765,115        11,941,980      28,125,855     52,832,950

Vacancy Rate                           13.4%              5.5%          10.1%          10.6%
                                       15.5%             12.8%          14.6%          14.2%
                                       10.9%             14.1%          10.5%          12.5%
                                       14.0%             12.2%          11.4%          12.1%

Net Absorption YTD 2004                441,379          177,389        2,621,771      3,240,539
                                      -280,520           37,520         154,419        -88,581
                                        50,690           79,405         -34,052         96,043
                                       211,549          294,314        2,742,138      3,248,001

Cap Rate (Going-In)                    7.80%             7.70%          7.50%          7.67%

                                              Downtown                         Midtown
                                    < 50,000 sqft    > 50,000 sqft   < 50,000 sqft  > 50,000 sqft
Average Term                          10 years         15 years        10 years       15 years
Concessions
 Free Rent                           8 months          12 months      12 months      15 months
 Tenant Improvements ($ per Sqft)       50                60              45             50

                                    NYC Average     NYC Maximum      NYC Minimum
Expense Ratio (Class A & B)           45.32%
Expense Ratio                         43.50%

Pre-tax IRR (%)                        9.40%
Pre-tax IRR (%)                        9.93%             12.0%           8.5%

Cap Rate (Going-In)                    7.60%
Cap Rate (Going-In)                    8.07%             10.0%           6.0%

Cap Rate (Terminal or Going-Out)       8.50%
Cap Rate (Terminal or Going-Out)       8.45%             10.0%           7.0%

Rental Growth (%)                      4.60%
Rental Growth (%)                         0.79%              3.0%              0.0%

Expense Growth (%)                        3.30%              5.0%              3.0%

Replacement Reserves psf                   0.38               0.20             1.00
Management fees                           2.19%              2.50%            1.50%
Leasing commissions                       3.75%              4.00%            3.50%

Average Marketing Time (in months)         7.42              12.00             3.00

                                            NYC
                                      Pct of Net Rent Pct of Total Rent
Reimbursement Ratio                        18.1%            15.3%
Expense Ratio (exclu property tax
and ground lease)                         34.5%              29.2%
Expense Ratio (exclu ground lease
but inclu property tax)                   53.6%              45.4%
Expense Ratio (inclu ground lease)        59.5%              50.3%
Property Tax Ratio                        19.1%              16.2%

Office-Central Business District (National Statistics except where noted) First Quarter, 2004 Investor Survey

                                         Average           Maximum          Minimum
Pre-tax IRR (%)                           9.9%               12.0%            8.5%
Pre-tax IRR (%)                          10.51%             12.25%            8.5%

Cap Rate (Going-In)                        8.3%              10.0%             7.3%
Cap Rate (Going-In)                       8.77%              10.5%             6.0%

Cap Rate (Terminal or Going-Out)           8.8%              11.0%             7.8%
Cap Rate (Terminal or Going-Out)          9.27%              11.0%             7.5%

Rental Growth (%)                          1.8%              4.0%              0.0%
Rental Growth (%)                         0.78%              5.6%             -8.0%

Expense Growth (%)                         2.8%              3.5%              2.0%
Expense Growth (%)                        2.79%              3.0%              1.5%

Average Marketing Time (in months)         7.05              12.00             3.00
Moody's Baa Corporate (%)                  6.4%
Moody's Aaa Corporate (%)                  5.5%
Class        Source
   A         Colliers
   B         Colliers
  C          Colliers


  A          Colliers
  B          Colliers
  C          Colliers


  A          Colliers
  B          Colliers
  C          Colliers


  A          Colliers
  B          Colliers
  C          Colliers


  A          Colliers
  B          Colliers
  C          Colliers


             Colliers




        Julian J Studley

        Julian J Studley
        Julian J Studley


        RealtyRates.com
        Natl R.E. Investor

          R.E. Research
          PWC Korpacz

          R.E. Research
          PWC Korpacz

          R.E. Research
          PWC Korpacz

          R.E. Research
                  PWC Korpacz

                  PWC Korpacz

                  PWC Korpacz
                  PWC Korpacz
                  PWC Korpacz

                  PWC Korpacz



                 SL Green (2004)

                 SL Green (2004)

                 SL Green (2004)
                 SL Green (2004)


nvestor Survey


                  R.E. Research
                  PWC Korpacz

                  R.E. Research
                  PWC Korpacz

                  R.E. Research
                  PWC Korpacz

                  R.E. Research
                  PWC Korpacz

                  R.E. Research
                  PWC Korpacz

                  PWC Korpacz
                  R.E. Research
                  R.E. Research
                                 Class A Net   Class A Gross Top Class A Net Top Class A Gross
                                Rent Dec. 2003 Rent Dec. 2003 Rent Dec. 2003  Rent Dec. 2003
                                (US$PSF/Year) (US$PSF/Year) (US$PSF/Year)     (US$PSF/Year)
Europe/Middle East/Africa
Abu Dhabi, UAE                       18.23              20.1       23.84            26.18
Amsterdam,The Netherlands             18.7             21.62       35.06            39.15
Antwerp, Belgium                     14.02             17.53       16.36            19.87
Athens, Greece                       24.54              35.3       49.09            63.46
Belgrade, Serbia and Montenegro      30.85             36.46       33.66            39.97
Brussels, Belgium                    22.21             27.46       32.14            37.98
Bucharest, Romania                   22.44             26.65       25.24            29.45
Budapest, Hungary                    19.63             24.54       28.05            32.96
Cape Town, South Africa               10.4             12.86       12.86            15.89
Copenhagen, Denmark                  22.79             25.83       25.95            28.98
Dublin, Ireland                      42.66              59.6       56.57            88.69
Düsseldorf, Germany                  18.37             25.38       30.85            41.16
Frankfurt, Germany                   21.74              25.6       47.68             54.7
Geneva, Switzerland                  27.79             29.81       35.58            37.68
Hamburg, Germany                     17.88             21.39       28.17            31.67
Helsinki, Finland                    32.26             36.46       37.87            42.78
Istanbul,Turkey                      13.38             21.19       20.07            29.55
Kiev, Ukraine                        30.11             41.26       35.69            47.96
Lisbon, Portugal                     28.05             31.56       34.36            39.27
London - City, UK                    62.49             82.13       80.34           105.34
London - Docklands, UK               41.06             49.99       62.49            74.99
London - West End, UK                89.27            116.05      111.59           144.62
Madrid, Spain                        34.01             38.92       38.57            44.18
Milan, Italy                         40.91             46.75       52.59            58.44
Moscow, Russia                       48.33             56.04       67.84            76.67
Munich, Germany                      19.63              N/A        44.88             N/A
Oslo, Norway                         28.55             25.06       32.03            39.69
Paris - La Defense, France           53.76             63.11       72.46            81.81
Paris - Central, France              63.11             72.46       67.79            80.64
Prague, Czech Republic               23.84             33.66       27.49            44.88
Rome, Italy                           37.4             42.07       46.75            51.42
Sofia, Bulgaria                      18.23             22.44       25.24            29.45
Stockholm, Sweden                    41.31             46.47       50.35            54.22
Stuttgart, Germany                   17.11              N/A         N/A              N/A
Vienna, Austria                      17.53             22.44       28.05            35.06
Warsaw, Poland                       25.65             31.23       31.23             36.8
Zurich, Switzerland                  46.44             49.44       61.42            67.42
Latin America
Bogotá, Colombia                     11.92             13.67      15.51            17.87
Buenos Aires, Argentina              10.97              13.9      15.49            19.63
Caracas,Venezuela                    20.07              N/A       23.42             N/A
Lima, Peru                           11.84             13.85      16.73            18.74
Mexico City, Mexico                  27.88             30.11      39.03            44.61
Santiago, Chile                      11.38             13.55       16.8            18.97
São Paulo, Brazil                    23.05             26.51      28.81            33.42


Source: http://www.irei.com/profiles/GlobalHighlights2003.pdf
                Sales    Cap
Vacancy Rate    Price  Rate/Initial
Dec. 2003 (%) (US$PSF) Yield (%)

     6.5         257        7.00
     12          257        7.30
      8          234        7.25
    N/A          362        9.50
     15          234       13.00
     8.8         479        6.00
     15          205       12.50
    18.1         175        8.50
    12.8          88       12.50
     7.4         362        6.30
      9          701        6.50
    10.2         526        5.75
     15          561        5.75
     3.2         487        5.30
     8.6         467        5.50
      5          526        6.25
     20          139        9.50
      6          195       15.00
     6.5         409        7.25
     14          927        6.25
     14          587        7.00
    11.7        1,487       6.00
     8.1         614        5.75
      5          760        6.20
     6.7         376        13.5
     9.1         409        6.00
     10          313        6.75
     7.5         760        7.00
     4.6         993        6.20
    12.5         292        8.75
      7          643        6.30
     28          117       14.50
     12          645        6.75
     5.3         321        6.00
     6.3         467        5.00
    18.3         279       10.00
     5.6         674        5.50

      4           73       14.40
    18.2         183        6.00
     22          130       15.00
    21.6          91       12.00
    16.2         167       12.50
    12.3         111       10.00
    13.1         208       13.00
                                                                         Square
Date    Address           Buyer             Seller                        Feet        Price
 Nov-03 655-671 Ave of    El Ad Group       Globix Corporation           100,000   $37,000,000
        the Americas
 Nov-03 415 Greenwich     Heritage          Apache Realty                206,000   $60,000,000
        Avenue            Partners
 Mar-04 100 Maiden Lane   Lalezarian        Cadwalader Wickersham &      300,000   $57,000,000
                          Developers        Taft
 Mar-04 67 Wall Street    Metro Loft Mgmt   Degi Deutsche Gesellschaft   303,175   $50,750,000
                                            Fuer Immobilienfonds

2004Q1 23 S. William                                                     25,000    $4,500,000
       Street
Price psf GBA Comments                               Source
     $370     condo conversion                       Colliers

    $291      condo conversion                       Colliers

    $190      Will be converted to residential use   Colliers

    $167      Will be converted to residential use   Colliers


    $180      is in process of conversion to         Colliers
              residential condo units.
    Address
180 Maiden Lane


14 Wall Street




Sources
http://www.igdnycf.com/monthly_june2004.shtml
                                                      Comments
            1,091,000 square feet Class A office building is coming to market and could go for around
            $400 million dollars.

            The 1 million square feet landmark Bankers Trust Building is coming to market and could
            command $150 to $200 a foot and is another candidate for residential conversion.




www.igdnycf.com/monthly_june2004.shtml
District         Midtown      Midtown                     Midtown        Midtown    Downtown
                  1540        745 Fifth    150 Fifth                 1177 Avenue of    140
Location        Broadway       Avenue       Avenue    2 Park Avenue   the Americas  Broadway
Reported Date   31-Mar-04     1-May-02     1-Oct-03     17-Sep-03       23-Oct-02    4-May-04
Class                                                    Class B         Class A      Class A
Price           430,000,000               102,500,000  292,000,000     409,000,000 465,000,000
GBA (sqft)       1,100,213                  207,000      963,859        1,000,000   1,200,000
Price/Sqft        390.83                     495.17       302.95          409.00      387.50
Buyer            Paramount                German Fund SEB Immobilien Paramount etal Paramount
     Midtown          Midtown
 1211 Avenue       52nd Street and
of the Americas     Park Avenue

  Class A              Class A
561,000,000          375,000,000
 1,900,000             630,320
   295.26               594.94
German Fund       RFR (German Dev.)
                                                                    In New York City, most buildings assign a loss factor irrespective of the total area
                Number Sqft per Building   Rentable Sqft Rentable   within a property. Thus an owner may arbitrarily decide that the rentable area shall be
    Floors      of Floors Floor   Sqft       per Floor     Sqft     25% larger than the usable area throughout the building. This results in a "loss factor"
   1st Floor         1    34,000                                    of 20%.
 2-3rd Floor         2    34,000
                                                                    Some useful formulas to keep in mind are:
  4-5th Floor        2    34,000
 6-28th Floor       23    28,000
                                                                    RENTABLE AREA = USABLE AREA x(1 + ADD-ON FACTOR)
30-41st Floor       12     6,900
43-47th Floor        5     4,500                                    LOSS FACTOR = (RENTABLE AREA LESS USABLE AREA) / RENTABLE AREA
49-53rd Floor        5     2,000
Useable Square Feet                                                 ADD-ON-FACTOR = (LOSS FACTOR X RENTABLE AREA) / USABLE AREA

                                                                    Typically, the usable area on a full floor is measured from the window line to the
Average Loss Factor
                                                                    outside surface of walls without windows, less any vertical penetrations such as
Average Add-on Factor
                                                                    stairwells or elevator shafts. Bathrooms and elevator lobbies are included in these full
                                                                    floor calculations. On partial floors, the entire floor is first measured to obtain the total
Rentable Area                                                       usable area. Then individually demised office areas are measured from window lines
                                                                    to outside walls, except when a demising wall separates two Tenants, in which case
                                                                    the measurement is extended to the halfway point in the wall. All common areas
                                                                    (elevator lobbies, shared mechanical rooms, bathrooms) are allocated to each
                                                                    demised office area on a proportional basis. The usable area for each individual office
                                                                    plus the allocated common areas equals the total usable on the floor.

                                                                    Financial comparisons between properties should always be based on usable square
                                                                    feet, or on another objective standard such as total rental cost per employee.
2a. Total Gross Building Area and 2b. Square Feet of First Floor
Ques#                                    Regular   With Bonus   2a. Question: If the building were built today, please discuss whether the
        Lot Area (square feet)                                  existence of zoning would have helped or been detrimental to a developer
        * FAR                                                   today compared to the existing total gross building area of the Woolworth
 2a.    Total Gross Building Area                               building.
        Loss Factor
                                                                Answer:
        Add-on Factor
 2b.    Net Rentable Area

        Total Gross Building Area
        * Lot Coverage Ratio
 2c.    First Floor Square Feet

        Maximum Base Height (feet)
         Floor-to-Floor Height (feet)
 2d.    Approximate Number of Floors
                                          Lower Floors Upper Floors (15th
                                         (1st - 14th Floor) Floor and Higher)
Asking Rent per sqft per year (GLA)
* Free Rent Period (8/12)
Total amount of free rent
 Term of Lease (in years)
Free Rent per Year psf GLA

Asking Rent per sqft per year (GLA)
- Free Rent per sqft per Year (GLA)
Effective Gross Rent per sqft per year

Discount
Downtown Manhattan, Class A
                                                                             Question: Given the information in the “NY Real Estate Market
                                                                             Stats” worksheet regarding the existing supply (vacancy) and
4a. When will "normal" vacancy occur?                                        existing demand (net absorption) in the market for space a.k.a.
                                                                             “space market”, prepare a table that shows how long it will take
              Rentable          Overall       Quarterly Net     Overall      for the remaining space to be “absorbed” by the market. More
   Date      Square Feet     Vacancy (sqft)    Absorption     Vacancy Rate   specifically, how long will it take for occupancy to reach a
                                                                             normal level wherein the market vacancy is 5%? Here we
                                                                             defined “market” as the downtown Manhattan submarket and
                                                                             the building class we are interested in is that which matches
                                                                             the classification for our building. For purposes of calculation,
                                                                             assume that the amount of rentable square feet and quarterly
                                                                             net absorption remains constant.

                                                                             Answer:




4b. How long will it take to absorb new WTC?


              Rentable          Overall       Quarterly Net     Overall
                                                                                 Question: Assuming that the proposed amount of office
   Date      Square Feet     Vacancy (sqft)    Absorption     Vacancy Rate
                                                                                 space for the WTC site of 10 million square feet does not
                                                                                 change, and that proposed completion date of year 2015 is
                                                                                 realized, how long will it take for the downtown market to
                                                                                 absorb this space given the current level of quarterly
                                                                                 demand and a “normal” vacancy rate of 5%?

                                                                                 Answer:




4c. Impact of Large Tenants

  Tenant     Rentable Sqft
    SEC
    NYU
   Fallon
 3 Tenants
 Total GLA
  Percent
                                                                                 GBA        GLA
                          Assumptions                                  Floor   Sqft/Floor Sqft/Floor                                         Flrs 1-14    Flrs 15-53   Total Flrs
            Operating Expense Ratio                                       1     34,000                 Total Gross Building Area (sqft)
            Vacancy Rate                                                  2     34,000                 Total Rentable Area (sqft)
            Loss Factor                                                   3     34,000
            Add-on Factor                                                 4     34,000                 Asking Rent per Year (GLA)
                                                                          5     34,000                 Free Rent per Year (GLA)
Question               Frontdoor-Cap Rate                                 6     28,000
            Purchase Price                                                7     28,000                 Total Free Rent per Year (GLA)
            + Immediate Capital Improvements                              8     28,000                 Total Asking Rent per Year (GLA)
            Adjusted Purchase Price                                       9     28,000
             Gross Building Area (sqft)                                 10     28,000                 Wtd Free Rent per Year (GLA)
            Price per Square Foot of GBA                                 11     28,000                 Asking Rent per Year (GLA)
            * Market Going-In Cap Rate                                   12     28,000
            Expected NOI per Sqft of GBA                                 13     28,000
            + Operating Expense per sqft of GBA                          14     28,000                 All square foot figures in income statement are
            Effective Gross Before Property Taxes                        15     28,000                 stated on a per year basis. GBA stands for Gross
            + Property Taxes per sqft GBA                                16     28,000                 Building Area. GLA stands for gross leasable
            Effective Gross Income per Sqft of GBA                       17     28,000                 area which is the same as net rentable area. In
            Divided by: (1 - Vacancy Rate)                               18     28,000                 this model, we are excluding replacement
            Required Effective Rent per sqft of GBA                      19     28,000                 reserves since we assume that they are part of
            * Useable Sqft of GBA                                        20     28,000                 TI.
            Total Required Effective Rent                                21     28,000
             Rentable Area                                              22     28,000
            Required Effective Rent per sqft GLA                         23     28,000
            + Average Free Rent per sqft GLA                             24     28,000
   5a.      Justified Asking Rent per sqft GLA                           25     28,000                                                                                                            Vacancy Rate
                                                                         26     28,000
            Market Asking Rent                                           27     28,000                                                          0.00         5.0%          5.5%     6.0%   6.5%      7.0%        7.5%   8.0%   8.5%   9.0%   9.5%   10.0%   10.5%   11.0%   11.5%   12.0%   12.5%   13.0%
                                                                         28     28,000                                                          5.0%
         Question: Is the deal financially feasible? Please explain.     30      6,900                                                         5.25%
                                                                         31      6,900                                   Cap Rate               5.5%
         Answer:                                                         32      6,900                                                         5.75%
                                                                         33      6,900                                                          6.0%
                                                                         34      6,900                                                         6.25%
                                                                         35      6,900                                                          6.5%
                                                                         36      6,900                                                         6.75%
                                                                         37      6,900                                                          7.0%
                                                                         38      6,900
                                                                         39      6,900
                                                                         40      6,900
                                                                         41      6,900
                                                                         43      4,500
                                                                         44      4,500
                                                                         45      4,500
                                                                         46      4,500
                                                                         47      4,500
                                                                         49      2,000
                                                                         50      2,000
                                                                         51      2,000
                                                                         52      2,000
                                                                         53      2,000
5b. Sensitivity Analysis
  One Variable Sensitivity Analysis
                  Present Amount    For Solvency     Percent -/+   Comment
 Purchase Price



 Vacancy Rate

 Going-In Cap
 Rate




 Loss Factor



  Two Variable Sensitivity Analysis
                    Constraint     Present Amount   For Solvency
 Purchase Price
 Vacancy Rate
 Going-In Cap
 Rate
 6a. Question: How much equity did The Witkoff Group invest in 233 Broadway? If they received a
 positive cash flow, what would their cash on cash before taxes and IRR be?

 Answer:




6b. Backdoor-DCR
Backdoor Analysis using DCR (Base Case)

Assumptions
Total Useable Square Feet
Loss Factor
Add-On Factor
Total Rentable Square Feet
Total Gross Building Area
Vacancy Rate
Operating Expenses per sqft
Property Taxes per sqft

Debt Service Coverage Ratio
B4 Tax Cash on Cash                                Net Operating Income
                                                   Divided by: DCR
Terms of Loan                                      Debt Service
Amortization Period (in years)                     Divided by: Mtg Constant
Period of Loan (in years)                          Justified Mortgage
Payments per Year
Interest Rate
Annual Mortgage Constant




                                                        Cash on Cash
                                                             2.00%
                                                             2.25%
                                                             2.50%
                                                             2.75%
                                                             3.00%
                                                             3.25%
                                                             3.50%
                                                             3.75%
                                                             4.00%
                                                             4.25%
4.50%
4.75%
5.00%
5.25%
5.50%
5.75%
6.00%
6.25%
6.50%
6.75%
7.00%
7.25%
7.50%
7.75%
8.00%
8.25%
8.50%
8.75%
9.00%
9.25%
? If they received a




             Market Asking Rent per sqft (weighted)
             - Average Free Rent per sqft GLA
             Effective Rent per sqft GLA
             * Total Rentable Square Feet
             Total Effective Rent
              Total Gross Building Area
             Effective Rent per sqft (GBA)
             - Vacancy
             Net Rental Revenues per sqft (GBA)
             - Operating Expenses per sqft
             - Property Taxes per sqft
             Net Operating Income per sqft (GBA)

                                                      Net Operating Income
                                                      - Debt Service
                                                      Before Tax Cash Flow
                                                      Divided by: ROE
              Justified Investment                    Justified Equity
              - Capital Expenditures
              - Title Insurance & Ancillary Fees
              Justified Price per sqft (GBA)

              Anticipated List Price per Sqft




                                                                                                   Interest R
                                                                             4.75%   5.00% 5.25%
                                                             2.00%
                                                             2.25%
                                                             2.50%
                                                             2.75%
                                                             3.00%
                                                             3.25%
                                                             3.50%
                                                             3.75%
                                                      R
                                                             4.00%
                                                      O
                                                      E      4.25%
E
    4.50%
    4.75%
    5.00%
    5.25%
    5.50%
    5.75%
    6.00%
    6.25%
    6.50%
    6.75%
    7.00%
    7.25%
    7.50%
    7.75%
    8.00%
    8.25%
    8.50%
    8.75%
    9.00%
    9.25%
                        Two Way Sensitivity Analysis
      Interest Rate
5.50% 5.75% 6.00% 6.25% 6.50% 6.75% 7.00% 7.25% 7.50% 7.75% 8.00% 8.25% 8.50%
8.75%
7a. Backdoor-Default Point

Backdoor Analysis using Default Point
Assumptions
Total Useable Square Feet
Loss Factor
Add-On Factor
Total Rentable Square Feet
Total Gross Building Area
Average Asking Rent per sqft (GLA)      Effective Rent per sqft (GBA)
Vacancy Rate                            * Default Point
Operating Expenses per sqft (GBA)       Capital Budget Outlays
Property Taxes per sqft (GBA)           - Operating Expenses psf
Default Point                           Available for Debt Service
Before Tax Cash on Cash (ROE)           Divided by: Mtg Constant
Terms of Loan                           Justified Mortgage
Amortization Period (in years)
Period of Loan (in years)
Payments per Year
Interest Rate
Annual Mortgage Constant
Market Asking Rent per sqft (weighted)
- Average Free Rent per sqft GLA
Effective Rent per sqft GLA
* Total Rentable Square Feet
Total Effective Rent
 Total Gross Building Area
Effective Rent per sqft (GBA)
                                         Effective Rent per sqft (GBA)
                                         * (1 - Default Point)
                                         Cash Cushion
                                         - Vacancy
                                         - Risk Reserve
                                         Before-Tax Cash Flow
                                         Divided by: ROE
                                         Justified Equity
Justified Investment
- Capital Expenditures
Justified Price psf GBA

Anticipated List Price per sqft GBA




                                                                         $0.00
                                                                         2.00%
                                                                         2.25%
                                                                         2.50%
                                                                         2.75%
                                                                         3.00%
                                                                         3.25%
                                                                         3.50%
                                               Cash on Cash              3.75%
                                                                         4.00%
                                                                         4.25%
                                                                         4.50%
                                                                         4.75%
                                                                         5.00%
                                                                         5.25%
                                                                         5.50%
                                                                         5.75%
                                                                         6.00%
                                                                         6.25%
                                                                         6.50%
                                                                         6.75%
                                                                         7.00%
                                                                         7.25%
                                                                         7.50%
7.75%
8.00%
8.25%
8.50%
8.75%
9.00%
9.25%
                                Default Point
65.0%   67.5%   70.0%   72.5%   75.0%   77.5%   80.0%   82.5%   85.0%
87.5%   90.0%
8. Condo Option

 8a. Penciling Out the Deal
   Floor   GBA Sqft/Floor         GLA/Flr   Assumptions
     1        34000                         Loss Factor
     2        34000                         Add-On Factor
     3        34000                         Total Gross Building Area
     4        34000                         Vacancy Rate
     5        34000                         Operating Expenses per sqft
     6        28000                         Property Taxes per sqft
     7        28000        Office           Debt Service Coverage Ratio
     8        28000       $26.00            B4 Tax Cash on Cash
     9        28000                         Terms of Loan
    10        28000                            Amortization Period (in years)
    11        28000                            Period of Loan (in years)
    12        28000                            Payments per Year
    13        28000                            Interest Rate
    14        28000                            Annual Mortgage Constant
    15        28000                         Asking Rent psf GLA per Year (Flrs 1-14)
    16        28000                         Asking Rent psf GLA per Year (Flrs 15-22)
    17        28000                         Free Rent psf GLA per Year (Flrs 1-14)
    18        28000        Office           Free Rent psf GLA per Year (Flrs 15-22)
    19        28000       $33.89            Cost of Condo Conversion
    20        28000                         Total GBA for Condo Units
    21        28000                         Average Price psft GBA for Condo
    22        28000                         Cost of Selling Condos
    23        28000                         Developer profit from Condo
    24        28000
    25        28000
    26        28000
    27        28000
    28        28000
    30         6900
    31         6900
    32         6900
    33         6900
    34         6900
    35         6900
    36         6900
    37         6900       Condos
    38         6900       $1,283
    39         6900
    40         6900
    41         6900
    43         4500
    44         4500
    45         4500
    46         4500
    47         4500
49   2000
50   2000
51   2000
52   2000
53   2000
            8
            page
            does this strategy make
            justified price per squar
            developer is earning a “

            Answer:




            8
            condo conversion?

            Answer
Net Operating Income
Divided by: DCR
Debt Service
Divided by: Mtg Constant
Justified Mortgage psf GBA
8a. Question: Given the assumptions on page 6 for the condo option and on page 4
page 6 for the debt coverage ratio backdoor approach together with the template provided,
does this strategy make financial sense? Complete the sensitivity table regarding the
justified price per square foot for various levels of developer’s profit and discuss whether the
developer is earning a “fair return” on the condo portion.

Answer:



                                                                                                    7.0%
8b. Question: What did this analysis NOT consider that is essential to the viability of the         7.5%
condo conversion?                                                                                   8.0%
                                                                                                    8.5%
Answer:
                                                                                                    9.0%
                                                                                                    9.5%
                                                                                                   10.0%
                                                                                                   10.5%
                                                                                                   11.0%
                                                                                                   11.5%
                                                                                                   12.0%
                                                                                                   12.5%
                                                                                                   13.0%
                                                                                                   13.5%
                                                                                                   14.0%
                                                                                                   14.5%
                                                                                                   15.0%
                                                                                                   15.5%
                                                                                                   16.0%
                                                                                                   16.5%
                                                                                                   17.0%
                                                                                                   17.5%
                                                                                                   18.0%
                                                                                                   18.5%
                                                                                                   19.0%
                                                                                                   19.5%
                                                                                                   20.0%
Asking Rent psf GLA per Yr (Flrs 1-14)
- Free Rent psf GLA per Yr (Flrs 1-14)
Effective Rent psf GLA per Yr (Flrs 1-14)
* Total GLA (Flrs 1-14)
Total Effective Rent (Flrs 1-14)

Asking Rent psf GLA per Yr (Flrs 15-22)
- Free Rent psf GLA per Yr (Flrs 15-22)
Effective Rent psf GLA per Yr (Flrs 15-22)
* Total GLA (Flrs 15-22)
Total Effective Rent (Flrs 15-22)

Total Effective Rent (Flrs 1-14)
+ Total Effective Rent (Flrs 15-22)
Total Effective Rent (Flrs 1-22)

Effective Rent per sqft (GBA)
- Vacancy
Net Rental Revenues per sqft (GBA)
- Operating Expenses per sqft
- Property Taxes per sqft
Net Operating Income per sqft (GBA)
                                                Net Operating Income
                                                - Debt Service
                                                Before Tax Cash Flow
                                                Divided by: ROE
Justified Investment psf GBA                    Justified Equity psf GBA
- Capital Expenditures
- Title Insurance & Ancillary Fees
Justified Price per sqft (GBA) for Offices
* Total Gross Building Area (Flrs 1-22)
Justified Price for Office Portion of Bldg

Condo Residual Approach
Average Price psft GBA for Condo
* Total GBA for Condo Units
Total Gross Profit from Condos
- Cost of Condo Conversion
- Cost of Selling Condos
- Developer profit from Condo Conversion
Justified Price for Condo Portion of Building
+ Justified Price for Office Portion of Bldg
Justified Price for 233 Broadway
 Total Gross Building Area
Justified Price per sqft Gross Building Area
                         Developer's Profit
                               1.5%
                               2.0%
and on page 4 through
e template provided,           2.5%
e regarding the                3.0%
 d discuss whether the         3.5%
                               4.0%
                               4.5%
                               5.0%
                               5.5%
                               6.0%
                               6.5%
                               7.0%
 the viability of the          7.5%
                               8.0%
                               8.5%
                               9.0%
                               9.5%
                              10.0%
                              10.5%
                              11.0%
                              11.5%
                              12.0%
                              12.5%
                              13.0%
                              13.5%
                              14.0%
                              14.5%
                              15.0%
                              15.5%
                              16.0%
                              16.5%
                              17.0%
                              17.5%
                              18.0%
                              18.5%
                              19.0%
                              19.5%
                              20.0%

								
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