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AYLIN GUCALP


TABLE OF CONTENTS

2

Aylin Gucalp


Projects Real Estate Finance

4

Valuation of Hurstbourne Grand Apartments

LEED Implementation

8

LEED Neighborhood Design Evaluation + Implementation for CornellTech Roosevelt Island Campus

Innovation in Participation and Planning

12

Crowdsourcing Collegetown, Ithaca

Sustainability Initiatives in Hotels

16

Where is the Value? Sustainability Initiatives in Hotels

REIT Valuation

20

Valuation of SL Green Realty Corp.

Table of Contents

3


RESUME

4

Aylin Gucalp


An investor group wants to explore the Louisville area and would like to valuate the Hurstbourne Grand Apartments under multiple ownership structures. The valuation began with a look at the Louisville, Kentucky market: its population and demographic breakdown. A closer look was taken at factors driving demand for and value of apartments: employment (growth, location quotients, major employers) and multifamily market (vacancy, construction, rents, recent transactions). The property was evaluated on qualitative factors and a back of the envelope evaluation was conducted to decide on a value/ purchase price. A pro forma was created for a maximum 10-year holding period and a purchase price was decided on based on annual net operating income and capitalization rates from recent transactions. Assumptions were made for potential revenue growth, occupancy, operating expense growth, capital expenses, capitalization rates, holding period, and inflation using information from REIS reports and PricewaterhouseCoopers’ investor surveys. Finally two ownership structures were evaluated: a stand alone basis and a general partnership structure with an IRR hurdle waterfall structure. A waterfall structure was modeled with cash flows from operations distributed through two tiers and cash flows from disposition distributed through five tiers.

PROJECT: Valuation of Hurstbourne Grand Apartments TYPE OF PROJECT: REAL ESTATE FINANCE CASE PROFESSOR: Wally Boudry, Assistant Professor of Real Estate at the School of Hotel Administration RESOURCES: CoStar REIS PricewaterhouseCoopers May 2013

PROJECT: Valuation of Hurstbourne Grand Apartments

5


PROJECT: VALUATION OF HURSTBOURNE GRAND APARTMENTS

 2012   (Actual)     2013   2014   2015   2016   2017   2018   2019   2020   2021   2022   2023                                                                                                                                                                                                                                                                              Poten'al  Rental  Revenue     4,838,384     4,869,420     5,015,503     5,165,968     5,320,947     5,453,970     5,590,320     5,730,078     5,844,679     5,961,573     6,050,996     6,141,761                                                                                                                                                                                                                                                                                                                                                                                                 48,384     -­‐     100,310     154,979     159,628     163,619     167,710     171,902     175,340     178,847     181,530     184,253                                                                                                                                                                                                                                                                                Effec7ve  Gross  Revenue     4,790,000     4,869,420     4,915,193     5,010,989     5,161,318     5,290,351     5,422,610     5,558,175     5,669,339     5,782,726     5,869,466     5,957,508                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐      Opera'ng  Expenses        Loss  to  Vacancy/   Collec'on    

 Repairs  and   Maintenances    

                              440,176    

                              448,980    

                              457,959    

                              467,118    

                              476,461    

                              485,990    

                              495,710    

                              505,624    

                              515,736    

                              526,051    

                              536,572    

                              547,304    

 Payroll    

                              375,618    

                              383,130    

                              390,793    

                              398,609    

                              406,581    

                              414,713    

                              423,007    

                              431,467    

                              440,096    

                              448,898    

                              457,876    

                              467,034    

                             

                              136,623    

                              139,355    

                              142,142    

                              144,985    

                              147,885    

                              150,843    

                              153,860    

                              156,937    

                              160,075    

                              163,277    

                              166,543    

                                                                      96,878     98,816    

                              100,792    

                              102,808    

                              104,864    

                              106,961    

                              109,100    

                              111,282    

                              113,508    

                              115,778    

                              118,094    

                              120,456    

 Administra've     133,944      Marke'ng    

                                                                                                                                                                                                                                                                                                                                                                        482,146     491,789     501,625     511,657     521,890     532,328     542,975     553,834     564,911     576,209     587,733     599,488                                                                                                                                                                                                                                                                                Total  Variable  Expenses     1,528,762     1,559,337     1,590,524     1,622,334     1,654,781     1,687,877     1,721,634     1,756,067     1,791,188     1,827,012     1,863,552     1,900,823                                                                                                                                                                                                                                                                                                                                                                             245,167     250,070     255,072     260,173     265,377     270,684     276,098     281,620     287,252     292,997     298,857     304,834      Taxes      U'li'es    

 Insurance    

                                                                      82,523     84,173    

                              165,915                            Total  Opera7ng  Expenses     2,022,367                           2,767,633      Net  Opera7ng  Income      Management   Fee    

 Capital  Expenditures    

 

Cash  Flow  aNer  Financing  

                                  87,574    

                                  89,326    

                                  91,112    

                                  92,934    

                                  94,793    

                                  96,689    

                                  98,623    

                              100,595    

                              102,607    

                                                                                                                                                                                                                                                                                                                                          169,233     172,618     176,070     179,592     183,184     186,847     190,584     194,396     198,284     202,249     206,294                                                                                                                                                                                                                                                         2,062,814     2,104,071     2,146,152     2,189,075     2,232,857     2,277,514     2,323,064     2,369,525     2,416,916     2,465,254     2,514,559                                                                                                                                                                                                                                                         2,806,606     2,867,344     2,922,133     3,031,688     3,118,645     3,207,998     3,299,814     3,365,810     3,433,126     3,472,297     3,511,808      

                                                                                                                                                                                                                                                                                                                                                                                                                                                          -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐     -­‐                                                                                                                                                                                                                                 2,867,344     2,922,133     3,031,688     3,118,645     3,207,998     3,299,814     3,365,810     3,433,126     3,472,297     3,511,808    

 Cash  Flow  aNer   Opera7ons      Financing  Costs    

                                  85,857    

 

 

                                                                                                                                                                                                                            1,383,098     1,383,098     1,383,098     1,383,098     1,383,098     1,383,098     1,383,098     1,383,098     1,383,098     1,383,098                                                                                                                                                                                                                                 1,484,246     1,539,035     1,648,590     1,735,546     1,824,900     1,916,715     1,982,711     2,050,028     2,089,198     2,128,710    

A Levered Pro Forma for the Maximum Holding Period of 10 Years. These projected annual cash flows are based on advertised rents for each apartment style as well as assumptions of rental and operating expense growth, occupancy, capital reserves, capitalization rates, holding period, and inflation.

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Aylin Gucalp


Waterfall Ownership Structure Cash Flows to Sponsor and Investor from Operation and Disposition. The structure of the waterfall has two tiers for cash flows from operation. The first tier calling for an 8% pref paid on contributed capital; the second split based on contributed capital. The cash flows from disposition are distributed through five tiers. The first tier is to return capital and then the second to pay any accrued pref. The third tier is our standard. Limited Partners (LP) are looking for 7 to 8% IRR’s free and clear, some are even looking for 10.5% returns in Southeast apartments. We believe that a minimum 12% leveraged IRR is a baseline acceptable job for this deal. Our fourth tier is a promote: to incentivize the General Partner (GP) to do superior work. Once cash flows reach a 12% IRR, they will be divided 20/80 until a 17% IRR is reached. The final tier is an extreme promote: if the GP can return the LP’s a 17% IRR, LP and GP will split all remaining cash flows 50/50.

Investors    Equity    

2013  

2014  

2015  

2016  

2017  

2018  

2019  

2020  

2021  

2022  

2023  

                          (17,879,940)  

 

 

 

 

 

 

 

 

 

 

                                  1,430,395                                                       9,323    

                                  1,430,395                                                   62,469    

                                  1,430,395                                               168,737    

                                  1,430,395                                               253,085    

                                  1,430,395                                               339,758    

                                  1,430,395                                               428,819    

                                  1,430,395                                               492,835    

                                  1,430,395                                               558,132    

                                  1,430,395                                               596,127    

 

 

 

 

 

 

 

 

                                  1,439,719    

                                  1,492,864    

                                  1,599,132    

                                  1,683,480    

                                  1,770,153    

                                  1,859,214    

                                  1,923,230    

                                  1,988,527    

2014  

2015  

2016  

2017  

2018  

2019  

2020  

2021  

2022  

                                              44,239                                                   10,508    

                                              44,239                                                   13,262    

                                              44,239                                                   15,242    

                                              44,239                                                   17,262    

                                              44,239                                                   18,437    

 Opera<on:  Tier  1      Opera<on:  Tier  2      Disposi<on:  Tier  1    

 

 Disposi<on:  Tier  2      Disposi<on:  Tier  3      Disposi<on:  Tier  4      Disposi<on:  Tier  5                              Investor  Cash  Flows     (17,879,940)  

IRR  

Sponsor    Equity    

12.4%  

2013  

                                                                                                                                                                                        44,239     44,239     44,239     44,239                                                                                                                                                                                                                     288     1,932     5,219     7,827    

 Opera;on:  Tier  2      

 

 

 

 

 

 

 

 

                                    (552,988)  

                                              44,527    

                                              46,171    

                                              49,458    

                                              52,066    

                                              54,747    

                                              57,501    

                                              59,481    

                                              61,501    

14.8%   12.5%  

 

 

 

 

 

 

 

 

 Disposi;on:  Tier  2      Disposi;on:  Tier  3      Disposi;on:  Tier  4      Disposi;on:  Tier  5      Sponsor  Cash  Flows     IRR   Standalone  IRR  

2023  

                                    (552,988)  

 Opera;on:  Tier  1    

 Disposi;on:  Tier  1    

                                  1,430,395                                               634,453                                   17,879,940                                                                 -­‐                                       7,529,563                                       1,432,161                                                               -­‐                                                                     2,026,522     28,906,513    

PROJECT: Valuation of Hurstbourne Grand Apartments

                                              44,239                                                   19,622                                               552,988                                                                 -­‐                                               232,873                                               358,040                                                               -­‐                                                                                     62,676     1,207,762      

7


RESUME

8

Aylin Gucalp


As a member of a team of eight students as well as two faculty advisors, we are reviewing the LEED Neighborhood Development v.3 manual in regards to its application to the new Cornell Tech campus in NYC. We examine each credit, explore different options in the context of this project, do required calculations, find and file necessary documentation, and request materials or resources as needed. We make suggestions on the latest design documents. We hope that by certifying the site as a neighborhood, we can promote cohesion amongst the structures as well as set guidelines for developers and contractors who work on the site. In November, I attended Greenbuild and since then we have been working closely with representatives from the Green Building Certification Institute (GBCI) and United States Green Building Council (USGBC) as we try to justify our adherence to the spirit of a prerequisite hindering our certification. We are currently in talks with USGBC to possibly certify the campus under LEED ND v.4 as a beta project for this new version.

PROJECT: LEED ND Evaluation + Implementation for CornellTech Roosevelt Island Campus TYPE OF PROJECT: HANDS ON LEED EXPERIENCE PARTNERS: Cornell University Sustainable Design Cornell University Facilities Skidmore Owings & Merill LLP United States Green Building Council Green Building Certification Institute August 2012- present

PROJECT: LEED ND Evaluation + Implementation for CornellTech Roosevelt Island Campus

9


PROJECT: LEED ND EVALUATION + IMPLEMENTATION FOR CORNELLTECH The new Cornell Tech Campus will be located on the south end of Roosevelt Island in New York City. Currently, the Coler-Goldwater Hospital resides in that space. The site was handed over to Cornell University in January 2013. The demolition process begins late 2013, with the first academic building opening 2017.

The Current Development on the Site

The Site Plan with the Entire Build Out Renderings of Central Campus

10

Aylin Gucalp


Scenario Analysis for NPD Prereq 3. While we explored the LEED ND manual version 3, we hit a roadblock with the Neighborhood Pattern and Design Prerequisite 3. This credit was intended to promote connectivity and walkability. This was measured by the number of intersections. Roosevelt Island has a distinct geography. It is an island with limited vehicle use and only one circular main road on the island. This setup made it nearly impossible to reach the desired level of intersection is, even though we met the letter of the credit: walkability. We have been working with the Green Building Certification Institute as well as the US. Green Building Council in order to explore our chances of receiving a favorable credit interpretation.

PROJECT: LEED ND Evaluation + Implementation for CornellTech Roosevelt Island Campus

11


PROJECT: CROWDSOURCING COLLEGETOWN, ITHACA

A Floorplan of the Ground Floor of 307 College Ave. I am working with Josh Lower, the developer of the site and Popularise to find the right tenants for the ground floor commercial space of the future 307 College Ave by asking students what businesses they want to see in Collegetown.

12

Aylin Gucalp


I wrote a research paper on new channels of participation in planning and development through crowdsourcing and crowdfunding. This paper includes a survey of the market, the many startup organizations currently springing up in this field, some projects using crowdsourcing or crowdfunding, and an exploration of the promises and pitfalls of these new technologies. Finally, I conducted a crowdsourced placemaking experiment in Collegetown, Ithaca in partnership with a developer and Popularise.

PROJECT: Crowdsourcing Collegetown, Ithaca TYPE OF PROJECT: RESEARCH + URBAN EXPERIMENT PARTNERS: Josh Lower, Developer at Urban Ithaca Real Estate Popularise Pike Oliver, Professor of Urban and Regional Studies October 2012- present

PROJECT: Crowdsourcing Collegetown, Ithaca

13


PROJECT: CROWDSOURCING COLLEGETOWN, ITHACA

Precedent Cases of Crowdsourcing for Ideas and Funding. From top left to right: 400 Fairview, Seattle on Popularise platform; 135th Street Beautification Project, NYC on ioby platform; Bristol Rising, CT by Renaissance Downtowns; Lowline, NYC on Kickstarter platform; +Pool, NYC on Kickstarter platform; Change by Us, NYC.

URBAN DESIGN ANALYSIS: Collegetown connecti

LO

Thi Col env of C ma

Fa

Map of Collegetown, Ithaca with Project Site. The project site is highlighted in red along with circles indicating the proximity of amenities within walking distance.

14

Aylin Gucalp


Project Board Statistics as of June 2013. We have over 20 ideas generated by community members as well as over 100 different votes among the various options.

Our Project Board on the Popularise Platform. This board allows individuals to learn about the project, follow it, contribute their ideas and support others ideas.

PROJECT: Crowdsourcing Collegetown, Ithaca

15


RESUME

16

Aylin Gucalp


Guidelines for sustainable design are spreading across the building sector and the hotel industry is no different. Major brands have begun the process of codifying their responses to environmental needs as part of their corporate responsibility. Hotels hold a unique opportunity because many large brands can exact change at a global scale, but geographic variability creates a challenge for hotels which must place sustainability in context. This paper looks at the market environment that has led to hotel innovation, the consumer response, the opportunities and challenges of hotels, case studies of major brands and outstanding hotels. Finally, Smith Travel Research data was analyzed to understand how sustainability creates value for hotels. Does it increase the value of the room? Does it increase the demand for the room? Or does it just decrease operating expenses?

PROJECT: Where is the Value? Sustainability Initiatives in Hotels TYPE OF PROJECT: RESEARCH PROFESSOR: Peng (Peter) Liu, Associate Professor of Real Estate and Finance at the School of Hotel Administration RESOURCES: Cornell Institute for Social and Economic Research Smith Travel Group May 2013

Cornell Institute for Social and Economics Research

PROJECT: Where is the Value? Sustainability Initiatives in Hotels

17


PROJECT: WHERE IS THE VALUE? SUSTAINABILITY INITIATIVES IN HOTELS

Figure 1: Regression of Property Demand and Property Revenue Property Demand (in Rooms Monthly) = 410.21 + 19.41(# of Rooms) + 4.79(Region) – 279.06(Operation Code) + 45.68(Scale) – 64.92(Price) – 43.72(Location) + 138.30(Green Element) R2 = 89.98% Standard Error: 1027.07 rooms Observations: 822 hotels Property Revenue (in Dollars) = 75811.88 + 3197.17(# of Rooms) – 7245.19(Region) – 14,460.38(Operation) + 21532.13(Scale) – 42198.58(Price) – 19584.26(Location) + 55420.45 (Green Element) R2 = 84.50% Standard Error: $217,705.37 Observations: 822 hotels Figure 2: Cluster Sample: Price- Luxury + Upscale Property Demand (in Rooms Monthly) = 72.47 + 19.73(# of Rooms) + 21.97(Region) – 323.28(Operation) + 70.42(Scale) + 62.78(Price) – 49.04 (Location) + 178.48(Green Element) R2 = 90.89% Standard Error: 1094.37 rooms Observations: 602 hotels Property Revenue (in Dollars) = -8915.31 + 3234.49(# of Rooms) – 7203.29(Region) – 30175.59(Scale) – 38192.18(Price) – 23761.60(Location) + 57145.00(Green Element) R2 = 84.90% Standard Error: $241,982.96 Observations: 602 hotels Figure 3: Cluster Sample: Location- Urban Property Demand (in Rooms Monthly) = 1441.27 + 19.50(# of Rooms) – 104.78(Region) – 1327.47(Operation) + 445.34(Scale) – 67.43(Price) + 110.65(Green Element) R2 = 91.46% Standard Error: 2219.76 rooms Observations: 103 hotels Property Revenue (in Dollars) = 248626.82 + 3263.75(# of Rooms) – 51948.92(Region) – 250501.22(Operation) + 95630.91(Scale) + 1191.74(Price) + 115379.10(Green Element) R2 = 85.84% Standard Error: $478,883.59 Observations: 103 hotels

Regression Analysis- Entire Sample and Clustered Sampling. We ran several regression models in order to see the magnitude of the Green Element. We looked at our entire sample. The green element in all of our models had a positive effect on the room demand and revenue [Figure 1].

Figure 4: Cluster Sample: Location- Suburban Property Demand (in Rooms Monthly) = 182.76 + 19.03(# of Rooms) + 24.90(Region) – 145.81(Operation) – 4.65(Scale) – 34.64(Price) + 125.12(Green Element) R2 = 85.07% Standard Error: 687.30 rooms Observations: 398 hotels Property Revenue (in Dollars) = 15303.89 + 2615.24(# of Rooms) – 3033.98(Region) + 6006.09(Scale) + 6417.91(Scale) – 57181.95(Price) + 17348.99(Green Element) R2 = 76.74% Standard Error: $131,539.71 Observations: 398 hotels

We decided to look at some demographic groups such as price of the room and location of the hotel. These models are above an 80% fit. Once again, the green element had a positive effect and even a greater magnitude in certain settings [Figure 2+3+4].

18

Aylin Gucalp


Comparison of Sustainability Goals and Initiatives of Major US. Based Hotel Brands. Initiatives have been labeled and sorted into several broad categories: competition, construction, design, education, measurement, purchasing, programmatic, and partnership. Competition includes internal competition within the group as well as external competition with other groups and any awards or recognition. Programmatic includes any initiatives that focus on a specific service provided by hotels such as meetings/ conventions or housekeeping.

Hotel Group

Table 1: Comparison of Sustainability Goals and Initiatives of Major US. Based Hotel Groups Carbon Goals

Energy Consumption Goals

Waste Goals

Water Consumption Goals

Hilton Worldwide

Reduce by 20% by 2014.

Reduce by 20% by 2014.

Reduce by 20% by 2014.

Reduce by 10% by 2014.

Hyatt

Reduce by 25% by 2015.

Reduce by 25% by 2015.

Reduce by 25% by 2015.

Reduce by 20% by 2015.

Marriott

No set goal.

Reduce by 20% by 2020.

No set goal.

Reduce by 20% by 2020.

Starwood Hotels and Resorts

No set goal.

Reduce by 30% by 2020.

No set goal.

Reduce by 20% by 2020.

Wyndham Hotels and Resorts

Reduce by 12% by 2016.

No set goal.

No set goal.

No set goal.

Initiatives

Labeled as: Competition, Construction, Design, Education, Measurement Purchasing, Programmatic, Partnership • [CONSTRUCTION] All properties within the global portfolio have achieved ISO 9001:2008 certification. • [MEASUREMENT] LightStay analyzes over 200 operational practices from product usage and food waste to transportation and housekeeping. The goal is to learn and measure in order to track progress. • [PARTNERSHIP] Works with Global Soap Project and others to focus purchasing on waste reduction as well as with Sundance Institute in order to publicize sustainability initiatives. • [COMPETITION] Green Key Eco-Rating- an internal competition for hotels within the group to earn recognition for their efforts. • [CONSTRUCTION] Developed sustainable construction guidelines. • [EDUCATION] Trains associates to identify opportunities for sustainability as part of Earth Training. • [PROGRAMMATIC] Offers linen reuse program. • [PROGRAMMATIC] Offers sustainable meeting guidelines and offers discounts to those who participate. • [PURCHASING] Committed to the reuse and purchasing of products that can be or are made of recycled materials. • [CONSTRUCTION] Uses LEED standards in construction. • [MEASUREMENT] Develops industry standard for carbon measurement- Green Hotels Global. • [PARTNERSHIP/ PURCHASING] Works with FutureFish to provide sustainable seafood. • [PARTNERSHIP] Works with global conservations to maintain natural landscapes and areas. • [PURCHASING] Improves the supply chain by working with furniture, fixture and equipment suppliers. • [DESIGN] Created a brand of sustainable hotels, The Element. It will have about 100 locations in the US. and expand to Europe next year. • [COMPETITION] Created internal competition to have employees suggest areas for environmental improvement. • [PARTNERSHIP] Formed guidelines in collaboration with Conservation International. • [PROGRAMMATIC] Offers sustainable meeting/ convention resources. • [PROGRAMMATIC] Offers linen reuse program. • [COMPETITION] #1 Hotel in Newsweek’s Greenest Companies. • [COMPETITION] Ranked in Top 100 Best Corporate Citizens in 2012. • [CONSTRUCTION/ DESIGN] Reduce consumption by installing efficient light bulbs, sensors and EnergyStar appliances, low flow fixtures, drip irrigation. • [MEASUREMENT] Published Global Best Practices for hotels in 2009 and 2010. • [MEASUREMENT] Publishes annual sustainability reports, carbon disclosures and runs study in conjunction with Cornell University School of Hotel Administration. • [MEASUREMENT] Created a Wyndham Green Toolbox. • [PURCHASING] Suppliers Program: Identifies and rewards product suppliers who also have environmental goals.

PROJECT: Where is the Value? Sustainability Initiatives in Hotels

19


RESUME

20

Aylin Gucalp


In order to calculate the net asset value of SL Greenâ&#x20AC;&#x2122;s portfolio, numbers were pulled from the most recent financial documents: the 10-K, the supplemental quarterly report as well as the earnings release. By adjusting the portfolio GAAP net operating income (NOI) to the cash NOI and adding in adjustments for acquisitions, dispositions or stabilizing properties, we were able to determine the forward 12- month cash NOI. We adjusted this by using capitalization trends provided through investor surveys by PwC as well as blending different asset cap rates by SL Greenâ&#x20AC;&#x2122;s portfolio breakdown. We then added in other assets including development and subtracted total liabilities and any preferred capital to find the net asset value. Finally, we determined the number of diluted shares outstanding and determined the net asset value per share and the price to share.

PROJECT: Valuation of SL Green Realty Corp TYPE OF PROJECT: REIT VALUATION PROFESSOR: Wally Boudry, Assistant Professor of Real Estate at the School of Hotel Administration RESOURCES: SL Green Realty Corp SNL PricewaterhouseCoopers May 2013

PROJECT: Valuation of SL Green Realty Corp

21


PROJECT: VALUATION OF SL GREEN REALTY CORP Recommendation. Our NAV suggests that SL Green is selling at value but we believe that it is worth more. At the price of $88 a share, an investor receives $1.04 of NAV per dollar of share. We can see several promising factors: There still is room to restructure debt and refinance at lower interest rates, lowering annual debt service and liabilities. SL Green has also shown its ability to work in real estate through other channels such as in a Mezzanine Debtor role like in 100 Church St. Some factors present risks to the company. In 2014, many leases will roll; we believe the quality of SL Green’s assets and management expertise will keep most of the tenants. Our hope is that this turnover will allow SL Green to bring leases that may have been signed during the market bottom out up to market rate and expand NOI. SL Green is known for the management of Manhattan office space and it is currently expanding its scope to development, West Coast properties, and residential properties. These are not SL Green’s core business and we don’t know for sure if they have the expertise to address the needs of these markets. If it does turn out that SL Green can find a similar place in those markets, there is a huge upside.

Portfolio NOI: Unaudited Free Rent Straight Line FAS 141 + Less Intangibles Ground Lease Straight Line Allowance for S/L Tenant Credit Loss Portfolio NOI: Unaudited (Quarter) Portfolio NOI (Annual) Adjustments to NOI West Coast, Retail, Residential Non-Same Store/Consolidated Assets New Acquisition Stabilizing Assets Total NOI x Growth Rate Forward 12-Month Cash NOI / Cap Rate Value of Operating Real Estate Land Held for Development Construction Progress Value of the Real Estate Management Asset Intangibles (included in Other Assets) Investment- Unconsolidated Joint Ventures Debt and Preferred Equity Investment Other Assets TOTAL ASSETS Liabilities- Consolidated Liabilities- Unconsolidated Joint Ventures Preferred Capital NET ASSET VALUE / Dilute Shares Outstanding NAV per share NAV to Price Price to NAV

22

1Q2013 216,141.00 (1,047.00) (2,931.00) (15,419.00) (713.00) 1,910.00 197,941.00 791,764.00 43,363.54 11,812.50 3,458.70 6,072.15 856,470.89 105.25% 813,749.06 5.635% 14,442,002.36 1,674,079 16,116,081.64 828,800.00 1,073,130.00 1,443,834.00 1,756,670.00 19,461,845.64 (7,368,562.00) (3,385,162.00) (346,607.00) 8,361,514.64 91,771 91.11 1.04 0.97

Aylin Gucalp


Acquisition Price Non-Same Store Consolidated 304 Park Ave 641 Sixth Ave

135,000,000.00 90,000,000.00

Retail: Same Store 1604 Broadway 11 W34th St 12-25 West 34th St 27-29 West 34th St 717 Fifh Ave Williamsburg Terrace

 

Non-Same Store 19-21 E65th St (80%) 21 E66th St (32.28%) 131-137 Spring St 724 Fifth Ave (50%) 752 Madison Ave (80%) 762 Madison Ave (80%) West Coast Portfolio

 

Residential 400 E57th St (80%) 400 E58th St (80%)

 

Acquisitions: 248-252 Bedford Ave (90%)

 

Portfolio

Manhattan

Cap Rate

Expected NOI

  6% 6%

 

8,100,000.00 5,400,000.00

 

100.0% 100.0%

 

8,100,000.00 5,400,000.00

8,784,904.70 235,961.05 232,236.08 583,749.13 1,194,811.50 1,528,619.04 817,884.80

461,661,971.00 7,534,091.00 83,425,111.00 123,050,000.00 223,895,842.00 7,131,361.00 16,625,566.00

5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

23,083,098.55 376,704.55 4,171,255.55 6,152,500.00 11,194,792.10 356,568.05 831,278.30

55.0% 80.0% 32.3% 100.0% 50.0% 80.0% 80.0%

12,695,704.20 301,363.64 1,346,481.29 6,152,500.00 5,597,396.05 285,254.44 665,022.64

  6.50%

 

  56,535,306.75

  6.00% 6.00%

 

36.0%

6,824,575.62 2,990,613.96  

7.00%

PwC Expectations

Our Expectations

5.25%

5.25%

National Suburban- 7.5

6.75% (lower for proximity to NYC)

Suburban (Westchester + CT)

15.47%  

Retail (Manhattan)

4-5% (CBRE Real Estate survey- 2.2013)

4%

1.32%  

Residential (Manhattan)

5.88% (Multifamily Month in Review)

6%

1.41%  

Office- LA (6.6%) + SF (6.4%)

6.5%

12.72%  

 

20,358,363.96  

5,459,660.50 2,392,491.17

7,852,151.66  

  90.0%

14,348,018.06

20,358,363.96  

80.0% 80.0%

3,843,000.00

4,593,261.59

 

 

 

13,500,000.00

 

  45.0% 63.0% 30.0% 50.0% 50.0% 10.9% 100.0%

 

Total for Segment  

19,522,010.45 374,541.35 774,120.25 1,167,498.25 2,389,623.00 13,998,342.85 817,884.80

54,900,000.00

West Coast

NOI to SL Green  

5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%

113,742,927.00 49,843,566.00

69.07%  

Portion of NOI  

390,440,209.00 7,490,827.00 15,482,405.00 23,349,965.00 47,792,460.00 279,966,857.00 16,357,696.00

869,773,950.00

Portion of Portfolio by SqFt

 

3,458,700.00

3,458,700.00

The Addition of Non-Same Store + Non-Core Portfolio Assets. In order to assess the true asset value, I estimated net operating incomes of non-same store commercial office as well as the non-same store assets such as retail, west coast, residential, and acquisitions. Several assets were also stabilized based on bringing occupancy levels to the portfolio average.

The Blended Capitalization Rate. I created a blended capitalization rate by looking at the portion of the portfolio by square foot of different sectors as well as looking at PwC investor expectations and taking a weighted average.

125 Chubb Way   150 Grand Street   7 Renaissance   180-182 Broadway   33 Beekman St   3 Columbus Circle   280 Park Ave   635 Sixth Ave   747 Madison Ave   985-987 Third Ave   1080 Amsterdam   1552-1560 Broadway   Total  

SL Green's Share of Book Value   SL Green's Share   Book Value   55,059,794   55,059,794   100%   100%   16,957,658   16,957,658   50.00%   5,600,614   2,800,307   25.50%   114,904,869   29,300,742   45.90%   35,268,183   16,188,096   48.90%   558,565,898   273,138,724   100.00%   1,052,187,848   1,052,187,848   100.00%   63,122,896   63,122,896   33.33%   71,275,653   23,756,175   100.00%   18,067,636   18,067,636   87.50%   28,930,433   25,314,129   50.00%   196,370,566   98,185,283   2,216,312,048   1,674,079,288  

PROJECT: Valuation of SL Green Realty Corp

A Table of Construction in Progress. Assets currently under construction were factored into the analysis as well as any possible minority interests assets.

23


THANK YOU

Thank you for your time and consideration. Feel free to contact me if you need any other information.

24

Aylin Gucalp


Aylin Gucalp's Real Estate Portfolio  

Currently a senior at Cornell University, Aylin studies Applied Economics and Management at the Dyson School concentrating in finance. She h...

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