This assessment consists of reviewing a proposed commercial transaction in relation to the financing
alternatives introduced in the subject and preparation of a report which summarizes the specifics of the given
transaction. The report should include an analysis of financing terms and the year one leveraged cash return
on equityfor the “as-is”and “as-renovated” scenarios as well as a summary of various financial risks
associated with each.
Read the uploaded Acquisition Report and review the accompanying trailing 12-month operating statement.
Complete the following:
1. Calculate the purchase price you would offer for acquisition of Bella Vista Apartments based on its current
condition and the trailing twelve months of revenue and expenses.
2. Calculate the maximum debt that could be obtained for this acquisition.
3. Calculate the year one leveraged cash return on equity based on operating the property in its current
condition after acquisition without renovations. Does this investment meet Global’s target return?
4. Calculate the year one leveraged cash return on equity based on completing the renovations and increasing
rents as described in the Value Add Opportunity section of the acquisition report. Does this investment meet
Global’s target return?
5. Provide an analysis of the financial risks associated with bothof the above scenarios –operate as-is without
renovations and with increased rents after completing renovations.