Hi, I have a value add office property with significant leasing in the first 5 years (40% NRA either through existing vacancy or tenant roll) and want to perform the analysis on a 7 year hold. Is there a simple way already built in the model to do a 5 year loan and have it re financed in year 6 with a perm loan? Thanks for the model. It’s great! -Eric
The short answer is no. With that said, you could use the construction module, set the operation begin date to month 1, and set the stabilization date (when the construction loan is taken out by perm) to some point in year five. This would effectively make the construction loan your bridge loan, with the take out in year five your perm loan.
With all of that said, admittedly the Ai1 is weak when the user intends to refi from one perm loan to another mid-hold. My suggestion, would be to perform your analysis as if you were to sell in year six rather than a refi. This would tell you what returns you’re getting out of the value-add period (years 1-5).
