% 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	$1,992,375		Rental Rate		$22.00	$     22.66	$      23.34	$     24.04	$     24.76		Selling price	5,899,000
General Contractors Fee	(included)		Vacancy		30%	3%	3%	3%	3%		Less:  Sales Fees	(236,000)
Construction Eng'g Fee	$59,771		Operating Expenses:								Less:  Cost	(2,547,316)
Architectural Fee	$119,543		Property taxes		63,683	0%	3%	3%	3%		Add back depreciation	277,592
Developer Fee	$199,238		Gas and Electric			3%	3%	3%	3%		Taxable Gain	3,393,276
Closing Costs	$176,390		Water/sewer			3%	3%	3%	3%		Tax on sale	678,655
Total Cost	$2,547,316		Insurance			3%	3%	3%	3%
			Maintenance-snow, garden, etc			4%	4%	4%	4%
Land Value	15%		Janitorial			3%	3%	3%	3%		Sales Proceeds	5,663,000
						0%	0%	0%	0%		Loan Payoff	(1,652,732)
Square Footage	25,000		Depreciation		55,518						Income Taxes	(678,655)
Total Cost/Sq Ft	$101.89										Cash Flow	3,331,613
					Year 1	Year 2	Year 3	Year 4	Year 5
Exit Capitalization Rate	9.00%		Rental Income		550,000	566,500	583,495	601,000	619,030
Discount Rate	12.00%		Vacancy		(165,000)	(16,995)	(17,505)	(18,030)	(18,571)
			Gross Effective Income		385,000	549,505	565,990	582,970	600,459
DEPRECIATION
# Years	39.0		Less Operating Expenses:
Depreciation Base	$2,165,219		Property taxes		63,683	63,683	65,593	67,561	69,588
Depreciation/Year	$55,518		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	$1,910,487		Janitorial		0	0	0	0	0
Interest Rate	7.00%				0	0	0	0	0
Amortization Period	20		Total Operating Expenses		63,683	63,683	65,593	67,561	69,588
Annual Payment	$180,336
Equity	$636,829		NET OPERATING INCOME		321,317	485,822	500,397	515,409	530,871
			15% of NOI to University for land		48,198	72,873	75,060	77,311	79,631
TAX RATES			Less Debt Service **		180,336	180,336	180,336	180,336	180,336
Capital Gains	20.0%		BEFORE TAX CASH FLOW		92,783	232,612	245,001	257,761	270,904
Marginal	30.0%		As a % of Equity		14.57%	36.53%	38.47%	40.48%	42.54%
			Debt Service Coverage		1.78	2.69	2.77	2.86	2.94
CLOSING COST ESTIMATES			Plus Principal		46,602	49,865	53,355	53,828	54,105
Loan Fee - 2%	39,848		Less Depreciation		(55,518)	(55,518)	(55,518)	(55,518)	(55,518)
Appraisal - .25%	5,000
Survey - .25%	5,000		TAXABLE INCOME		83,867	226,958	242,837	256,070	269,491
Improvements	0		TAX SAVINGS (BURDEN)		(25,160)	(68,088)	(72,851)	(76,821)	(80,847)
Title - .25%	5,000		BEFORE TAX CASH FLOW		92,783	232,612	245,001	257,761	270,904
Recording Fee - .1%	2,000		Less: Income Tax		(25,160)	(68,088)	(72,851)	(76,821)	(80,847)
Interest Res. (12% Constr loan)	119,543		Sales Proceeds						3,331,613
			TOTAL CASH FLOWS	-636829.0625	67,623	164,525	172,150	180,940	3,521,669
Total Closing	176,390
			VALUATION AND RETURN MEASURES:			IRR		51.8%			Blue numbers are variables
						NPV		1,598,678			Red numbers are results