Add 'Case Study # 13 - "BioMedica" Chain Drugstore - Build-to-Suit Investment In Colombia (Case Only).'

Case-Study-%23-13---%22BioMedica%22-Chain-Drugstore---Build-to-Suit-Investment-In-Colombia-%28Case-Only%29..md

@@ -0,0 +1,83 @@
+<br>In this triple net lease case study, we explore a real-world scenario including the advancement of a build-to-suit commercial [residential](https://solutionsinmobiliary.com) or commercial property for a leading pharmacy chain in Colombia. By examining this scenario, you will get hands-on experience examining a triple net lease (NNN) structure, a typical kind of lease in business realty, where tenants are responsible for residential or commercial property expenditures. The task includes the acquisition of land in a tactical location and the construction of a residential or commercial property customized to meet the tenant's operational requirements, providing a strong example of a development-focused NNN deal.<br>
+<br>Practice makes ideal! This is a genuine situation based upon real residential or commercial properties and circumstances. Names and areas have actually been changed for [confidentiality](https://topdom.rs) factors, but the basics are real-to-life.<br>
+<br>Each case study shared in this series mirrors real life circumstances, either in terms of the types of offers you will look at in numerous roles or the kinds of modeling tests you'll be required to perform as part of the interview process. You can search this and other case studies in the A.CRE Library of Real Estate Case Studies.<br>
+<br>Are you an Accelerator Advanced member? Download this case study files for free in the Career Advancement Endorsement. Not yet an Accelerator member? Consider enrolling today in the Accelerator, the market's go-to realty financial modeling training program used by top companies and elite universities to train the next generation of CRE specialists.<br>
+<br>Background<br>
+<br>You are a recent graduate of the University of Central Florida (UCF) with a degree in Business Administration, concentrating on Real Estate. While studying in Florida, you established a keen interest in worldwide property markets, particularly in Latin America. This interest was sustained by your family ties to Colombia, where you invested lots of summers checking out relatives and witnessing firsthand the rapid urbanization and development in cities like Bogotá and its surrounding areas.<br>
+<br>Upon finishing from UCF, you operated in the banking sector in the U.S., acquiring important experience in [monetary analysis](https://investir-en-grece.fr) and investment strategies. However, your passion genuine estate led you to join a small real estate financial investment LLC, where you quickly advanced to a role that involved managing financial modeling for different tasks. During this time, you took the A.CRE Real Estate Financial Modeling Accelerator course, ending up being a professional in the field.<br>
+<br>Now, leveraging your expert experience and deep understanding of both the U.S. and Colombian markets, you are prepared to embark on your very first genuine estate investment promotion in Colombia, in a region you understand well from your household connections and routine sees. This task includes developing a build-to-suit commercial residential or commercial property for lease to a major pharmacy chain that is expanding rapidly in Colombia and beyond.<br>
+<br>Time to Make Your Mark<br>
+<br>After years of sharping your abilities and building a track record in realty monetary modeling, you're all set to enter the spotlight as a property promoter. With a wealth of experience behind you and a deep connection to the Colombian market, you're figured out to [discover](https://patrimoniomallorca.com) a financial investment that guarantees long-term, stable returns-one that can work as the foundation of your new venture.<br>
+<br>As you start your search, you reconnect with brokers who focus on retail property in Colombia. It's shortly before a previous coworker connects with an appealing opportunity-a land advancement job in Chía, Cundinamarca, tailored for a significant pharmacy chain, BioMedica. The project in concern has a tactical location considering that the roadways around the lot are being expanded, which will generate more car traffic, and strong tenant appeal catch your attention instantly. Sensing the potential, you decide to dive deeper, performing a thorough financial analysis to identify if this could be the flagship financial investment that sets your path to success.<br>
+<br>The Opportunity<br>
+<br>The task involves obtaining a prime piece of land in Chía, Cundinamarca, and building a build-to-suit industrial residential or  specifically tailored to the requirements of a leading drugstore chain. The drugstore has a strong brand name presence and is broadening strongly in the area, making this a highly attractive tenant.<br>
+<br>This project is especially compelling due to its customized style to satisfy the specific needs of the Drugstore, our tenant demands consist of a space with parking space, close roadways and drive through, to make sure [optimum operational](https://properties.shabs.co.za) [performance](https://centralscotlandlettings.co.uk) and client ease of access. However, the monetary dynamics of this investment need mindful consideration. For instance, while the lease contract provides a rental increase rate throughout the base term and renewal alternatives to hedge versus inflation (IPC).<br>
+<br>To make a notified choice, it's crucial to design the predicted financial performance of this advancement and determine if its long-lasting economics align with your brand-new firm investment method.<br>
+<br>NNN Case Study - "BioMedica" Chain Drugstore<br>[questionsanswered.net](https://www.questionsanswered.net/article/how-price-your-home?ad=dirN&qo=serpIndex&o=740012&origq=homes)
+<br>Main Assumptions<br>
+<br>Residential or commercial property Description<br>
+<br>- Address: Calle 2 # 12-24 Chía, Cundinamarca - Colombia.
+- GLA: 34,400 SF
+- Land Area: 34,444 SF
+- Constructed Area: 6,300 SF
+Replacement Cost (consisting of land worth): $45/SF.
+- Land worth: $18/SF.
+- Year of construction: 2024.
+[- Lease](https://spanishloveshackproperties.com) term arrangement: 15 years.
+Option: 5-year option renewal.
+- Rental boosts: Colombian IPC ([customer](https://kythai.plotpropertywala.org) Price index) Linked.
+- Lease type: Triple Net Lease (NNN) - The landlord will supply an in-depth breakdown of these expenses yearly, and the renter will reimburse the property owner for these expenditures monthly.<br>
+<br>Financial Assumptions<br>
+<br>- Land Cost: 620,000 USD.
+- Closing Costs: 4.5%.
+- Development Cost: 843,566 USD.
+- Approved Lease: 14,355 USD<br>
+<br>Timing<br>
+<br>- License: Months 1-3.
+- Land Purchase: Month 4.
+- Development: Months 5-10<br>
+<br>Operating Expenses:<br>
+<br>- Residential or commercial property management: 7%.
+- Fiduciary administration and payments: 600 USD/Month.
+- Property tax: 1,946 USD/Year.
+- Accounting: 500 USD/Month.
+- Capital Reserves: 0.5% on the value of the construction, reserving proportionally each month.<br>
+<br>General Investment Assumptions<br>
+<br>- 10-year analysis period.
+- All-cash purchase (i.e. no financing).
+- All operating expenses are paid by the renter.
+- No capital investment over the hold duration.
+- Initial cap rate based on https://latamcaprates.colliers.com/.
+- Reversion cap rate is 50 bps above the acquisition cap rate.
+- Selling expenses 100 bps less that the market price.
+Market Rent on lease agreement: $2.40/ SF, growing by IPC.<br>
+<br>The Task<br>
+<br>Use the A.CRE "STNL (Single Tenant Net Lease) Valuation Model" to underwrite this build-to-suit single-tenant net lease (STNL) job. This design is specifically developed for single-tenant, net lease residential or commercial properties and consists of functions that permit you to finance development jobs from acquisition through stabilization and disposition.<br>
+<br>Answer the Following Questions for the BioMedica Project.<br>
+<br>- Is the advancement cost per SF above or below replacement cost and by how much?
+- What is the average totally free and clear return over the 10-yr hold duration?
+- What is the IRR over the hold period?
+- What is the unlevered equity numerous based upon the forecasted money streams over the 10-year hold duration, and how does this metric align with your financial investment requirements?<br>
+<br>Conceptual Questions<br>
+<br>- Evaluate the impact of the lease structure, including lease escalation stipulations, on the net present worth (NPV) of the investment. How does this influence the overall IRR?
+- How does the place's forecasted growth and lorry traffic effect the investment's capacity for long-lasting success?<br>
+<br>Extra Credit<br>
+<br>- Partnership Model: Assume you bring in a regional financier to contribute 95% of the needed equity while your share it's the staying 5%. Propose a waterfall structure where the investor gets a favored return of 9% on their equity contribution, followed by a pari-passu split of staying money circulations. Calculate the IRR and equity multiple for both you and the investor.
+- Sensitivity Analysis: Conduct a level of sensitivity analysis to reveal how modifications in key presumptions, such as cap rates, lease escalations, and job rates, effect the overall return metrics.<br>
+<br>Real Estate Case Study Creator by A.CRE<br>
+<br>Are you looking for a tool to assist you simplify the generation of realty case studies? We welcome you to find A.CRE's Real Estate Case Study Creator Assistant, an innovative tool designed for economic experts, financiers and realty professionals. This assistant, powered by expert system, will allow you to produce customized case research studies customized to your specific needs, enhancing your analysis and decision-making capabilities.<br>
+<br>Don't miss this opportunity to enhance your work. Explore more about this powerful tool in our complete post here - start using it today and take your analysis to the next level!<br>
+<br>- Note: Custom GPTs are now offered to both paid and complimentary users of ChatGPT. Click here for more information.<br>
+<br>Frequently Asked Questions about the BioMedica Chain Drugstore Build-to-Suit Investment Case Study<br>
+<br>What type of lease is utilized in this case study?<br>
+<br>This case research study includes a Triple Net Lease (NNN) where the tenant compensates the landlord for residential or commercial property expenditures, [consisting](https://tillahouses.com) of taxes, insurance, and upkeep. The lease also [consists](https://ssrealestate.ae) of IPC-linked rental boosts and a 5-year renewal alternative.<br>
+<br>Where is the BioMedica task found?<br>
+<br>The job lies in Chía, Cundinamarca, Colombia at Calle 2 # 12-24, a tactical area anticipated to gain from road expansion and increased vehicular traffic.<br>
+<br>What are the primary advancement and financial presumptions? <br>
+<br>Land expense: $620,000<br>
+<br>Closing costs: 4.5%<br>
+<br>Development expense: $843,566<br>
+<br>Approved lease rate: $14,355/ month<br>
+<br>Lease term: 15 years with 5-year option<br>
+<br>Rental escalation: Linked to IPC<br>
+<br>All-cash purchase