% Change
ASSUMPTIONS			ANNUAL INCOME & EXPENSES		Base Year	Year 2	Year 3	Year 4	Year 5		GAIN ON SALE
Land	(owned by U of M)		Rental Rate Increase			3.0%	3.0%	3.0%	3.0%
Building	$2,435,125		Rental Rate		$18.00	$     18.54	$      19.10	$     19.67	$     20.26		Selling price	4,515,000
General Contractors Fee	(included)		Vacancy		30%	3%	3%	3%	3%		Less:  Sales Fees	(181,000)
Construction Eng'g Fee	$73,054		Operating Expenses:								Less:  Cost	(3,109,609)
Architectural Fee	$146,108		Property taxes		77,740	0%	3%	3%	3%		Add back depreciation	338,868
Developer Fee	$243,513		Gas and Electric			3%	3%	3%	3%		Taxable Gain	1,563,259
Closing Costs	$211,810		Water/sewer			3%	3%	3%	3%		Tax on sale	312,652
Total Cost	$3,109,609		Insurance			3%	3%	3%	3%
			Maintenance-snow, garden, etc			4%	4%	4%	4%
Land Value	15%		Janitorial			3%	3%	3%	3%		Sales Proceeds	4,334,000
						0%	0%	0%	0%		Loan Payoff	(2,072,432)
Square Footage	25,000		Depreciation		67,774						Income Taxes	(312,652)
Total Cost/Sq Ft	$124.38										Cash Flow	1,948,916
					Year 1	Year 2	Year 3	Year 4	Year 5
Exit Capitalization Rate	9.00%		Rental Income		450,000	463,500	477,405	491,727	506,479
Discount Rate	12.00%		Vacancy		(135,000)	(13,905)	(14,322)	(14,752)	(15,194)
			Gross Effective Income		315,000	449,595	463,083	476,975	491,285
DEPRECIATION
# Years	39.0		Less Operating Expenses:
Depreciation Base	$2,643,167		Property taxes		77,740	77,740	80,072	82,475	84,949
Depreciation/Year	$67,774		Gas/Electric		0	0	0	0	0
			Water/sewer		0	0	0	0	0
FINANCING			Insurance		0	0	0	0	0
Loan to Value	75%		Maintenance		0	0	0	0	0
Total Debt	$2,332,207		Janitorial		0	0	0	0	0
Interest Rate	9.00%				0	0	0	0	0
Amortization Period	20		Total Operating Expenses		77,740	77,740	80,072	82,475	84,949
Annual Payment	$255,485
Equity	$777,402		NET OPERATING INCOME		237,260	371,855	383,010	394,501	406,336
			15% of NOI to University for land		35,589	55,778	57,452	59,175	60,950
TAX RATES			Less Debt Service **		255,485	255,485	255,485	255,485	255,485
Capital Gains	20.0%		BEFORE TAX CASH FLOW		(53,814)	60,592	70,074	79,841	89,900
Marginal	30.0%		As a % of Equity		-6.92%	7.79%	9.01%	10.27%	11.56%
			Debt Service Coverage		0.93	1.46	1.50	1.54	1.59
CLOSING COST ESTIMATES			Plus Principal		45,586	49,689	54,161	54,933	55,405
Loan Fee - 2%	48,703		Less Depreciation		(67,774)	(67,774)	(67,774)	(67,774)	(67,774)
Appraisal - .25%	5,000
Survey - .25%	5,000		TAXABLE INCOME		(76,001)	42,507	56,462	67,000	77,532
Improvements	0		TAX SAVINGS (BURDEN)		22,800	(12,752)	(16,938)	(20,100)	(23,260)
Title - .25%	5,000		BEFORE TAX CASH FLOW		(53,814)	60,592	70,074	79,841	89,900
Recording Fee - .1%	2,000		Less: Income Tax		22,800	(12,752)	(16,938)	(20,100)	(23,260)
Interest Res. (12% Constr loan)	146,108		Sales Proceeds						1,948,916
			TOTAL CASH FLOWS	-777402.1875	(31,014)	47,839	53,135	59,741	2,015,557
Total Closing	211,810
			VALUATION AND RETURN MEASURES:			IRR		23.0%			Blue numbers are variables
						NPV		404,029			Red numbers are results