UESE AND SOURCES

---

Transcript

---

Welcome to this video. In this video, I will cover the Sources and Uses section in the ARGUS Portfolio Model. In a typical investment, the sources of capital consist of debt and equity. Uses of capital consist of the purchase price and various closing costs.

Uses

I am going to input $85 million for the purchase price of the portfolio. $80,000 for the environmental site assessment. $250,000 for the legal expenses. $80,000 for the appraisal. The mortgage Brokerage Fee is 0.25% of the senior debt amount. $1.2 million for the land transfer tax. Mezzanine closing cost is 2% of the mezzanine amount. $2.5 million for tenant improvement and leasing commissions reserve. $2 million for capital expenditure reserve. Reserves are the funds put aside for future uses. This topic will be covered in detail in the Other Assumption Section.

Sources

I have finished the uses. Let’s go back to the sources. I will put $59.5 million for the senior debt, which is roughly 65% of the total uses. $8.5 million for the mezzanine. This leaves us total equity of $23 million. The general partner will contribute 10% of the equity, and the limited partner will contribute the remaining 90%.

Final Check

Finally, I need to check if the Total Sources match the Total Uses. The total sources are $91million, and the total uses are $91 million. I am all set with the Sources and Uses section. Thank you for watching this video. I will see you in the next one.