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<br />CONSULTATION (continued)
<br />stream over the 26-year period. The alternative to using the lower discount rate would be
<br />to build in a growth rate of 3 to 4 percent, which would indicate an appropriate discount rate
<br />at the mid-point of 10.5 to 11.5 percent. Either technique results in the same present value
<br />conclusion. This discount range is generally supported by local and nafional information
<br />regarding discount rates appropriate for office buildings. The mid point of the discount
<br />range or 7.5 percent (mazket oriented) and 6.34 percent (project oriented) will be presented.
<br />The actual calculation of the present value of the income stream versus the build analysis is
<br />summarized on the following chart.
<br />TECEINIQUE ONE -LEASE VS. BUII.DING COST ANALYSIS
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<br />Income Stream (Ixase Scenario)-
<br />Office I,ease Tncome: 114,557 SF x$1.47/SF = $168,399
<br />Parking I.ease Income: 277 Spaces z$47.22/Space = t3,080
<br />Total MontWy Income $181,479
<br />Present Value Analysis-
<br />MonUily Income Stream: z Present Value of One per Period* = Preseut Value
<br />$181,479 z 137.9544 (7.5%) _ $?5,035,827
<br />Cost per Square Foot - $218.54lSF
<br />$181,479 x 153.5146 (6.34YO) _ $27,859,676
<br />Cost per Square Foot $243.19/SF
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<br />Total Building Cost $30,670,149
<br />Less: TransitGrants (9,844,000)
<br />TotalBuildingCost-MarionCounty $20,826,149 = $181.80/SF
<br />* Beginning of Period Payments for 26 years
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