% 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	$2,213,750		Rental Rate		$20.00	$     20.60	$      21.22	$     21.85	$     22.51		Selling price	5,207,000
General Contractors Fee	(included)		Vacancy		30%	3%	3%	3%	3%		Less:  Sales Fees	(208,000)
Construction Eng'g Fee	$66,413		Operating Expenses:								Less:  Cost	(2,828,463)
Architectural Fee	$132,825		Property taxes		70,712	0%	3%	3%	3%		Add back depreciation	308,230
Developer Fee	$221,375		Gas and Electric			3%	3%	3%	3%		Taxable Gain	2,478,767
Closing Costs	$194,100		Water/sewer			3%	3%	3%	3%		Tax on sale	495,753
Total Cost	$2,828,463		Insurance			3%	3%	3%	3%
			Maintenance-snow, garden, etc			4%	4%	4%	4%
Land Value	15%		Janitorial			3%	3%	3%	3%		Sales Proceeds	4,999,000
						0%	0%	0%	0%		Loan Payoff	(1,861,113)
Square Footage	25,000		Depreciation		61,646						Income Taxes	(495,753)
Total Cost/Sq Ft	$113.14										Cash Flow	2,642,134
					Year 1	Year 2	Year 3	Year 4	Year 5
Exit Capitalization Rate	9.00%		Rental Income		500,000	515,000	530,450	546,364	562,754
Discount Rate	12.00%		Vacancy		(150,000)	(15,450)	(15,914)	(16,391)	(16,883)
			Gross Effective Income		350,000	499,550	514,537	529,973	545,872
DEPRECIATION
# Years	39.0		Less Operating Expenses:
Depreciation Base	$2,404,193		Property taxes		70,712	70,712	72,833	75,018	77,268
Depreciation/Year	$61,646		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	$2,121,347		Janitorial		0	0	0	0	0
Interest Rate	8.00%				0	0	0	0	0
Amortization Period	20		Total Operating Expenses		70,712	70,712	72,833	75,018	77,268
Annual Payment	$216,064
Equity	$707,116		NET OPERATING INCOME		279,288	428,838	441,704	454,955	468,603
			15% of NOI to University for land		41,893	64,326	66,256	68,243	70,291
TAX RATES			Less Debt Service **		216,064	216,064	216,064	216,064	216,064
Capital Gains	20.0%		BEFORE TAX CASH FLOW		21,331	148,449	159,384	170,648	182,249
Marginal	30.0%		As a % of Equity		3.02%	20.99%	22.54%	24.13%	25.77%
			Debt Service Coverage		1.29	1.98	2.04	2.11	2.17
CLOSING COST ESTIMATES			Plus Principal		46,356	50,065	54,070	54,687	55,057
Loan Fee - 2%	44,275		Less Depreciation		(61,646)	(61,646)	(61,646)	(61,646)	(61,646)
Appraisal - .25%	5,000
Survey - .25%	5,000		TAXABLE INCOME		6,041	136,867	151,808	163,689	175,660
Improvements	0		TAX SAVINGS (BURDEN)		(1,812)	(41,060)	(45,542)	(49,107)	(52,698)
Title - .25%	5,000		BEFORE TAX CASH FLOW		21,331	148,449	159,384	170,648	182,249
Recording Fee - .1%	2,000		Less: Income Tax		(1,812)	(41,060)	(45,542)	(49,107)	(52,698)
Interest Res. (12% Constr loan)	132,825		Sales Proceeds						2,642,134
			TOTAL CASH FLOWS	-707115.625	19,519	107,389	113,842	121,541	2,771,685
Total Closing	194,100
			VALUATION AND RETURN MEASURES:			IRR		37.7%			Blue numbers are variables
						NPV		1,006,180			Red numbers are results