Sheraton Hotel Redding At Sundial Bridge - Redding Record ...

Discounted Cash Flow
Analysis –
“When Stabilized”
FIGURE 10-19 DISCOUNTED CASH FLOW ANALYSIS – WHEN COMPLETE
Discount Factor Discounted
Year Net Income @ 11.23% Cash Flow
2012/13 $1,065,835 0.89901 $958,192
2013/14 1,519,000 0.80821 1,227,675
2014/15 1,475,050 0.72659 1,071,754
2015/16 1,730,500 0.65321 1,130,375
2016/17 1,784,500 0.58724 1,047,925
2017/18 1,841,150 0.52793 971,999
2018/19 1,898,400 0.47461 901,005
2019/20 1,958,350 0.42668 835,588
2020/21 2,020,000 0.38359 774,848
2021/22 24,950,000 * 0.34485 8,603,940
Estimated Value $17,523,301
(SAY) $17,500,000
Reversion Analysis
11th Year's Net Income (before taxes a nd ground rent) $2,878,000
Les s Real Es tate Ta xes $304,338
Les s Griound Rent $452,000
11th Year's Net Income (after taxes a nd ground rent) $2,121,662
Ca pi ta l i za ti on Ra te 9.0%
Total Sales Proceeds $23,574,026
Less: Transaction Costs @ 3.0% 707,221
Net Sales Proceeds $22,866,805
*10th year net income of $2,083,150 plus sales proceeds of $22,867,000
The preceding valuation process was repeated using the projected cash flows
beginning as of the stabilized year. The discounted cash flow procedure is
summarized as follows.
February-2011 Income Capitalization Approach
Sheraton Hotel Redding At Sundial Bridge – Redding, California 95