16231 Lecture Notes - Lecture 9: Earnings Before Interest And Taxes, Net Lease, Capital Expenditure
Document Summary
Important that budget is in line with owner"s asset strategy; Budgets basic principles: budgets look at: Rent & other income (parking & signage) Non-recoverable expenses: to establish net operating income (noi) Capital expenditure: capital expenditure not included in standard property budget, separate 1, 3, 5 and 10-year capital expenditure budgets prepared; Capital expenditure is unique to an owner (does not have to be spent) and can vary depending on owner"s strategy; Capital expenditure not included in budget cashflows or dcf"s from a valuation perspective, it is a deduction on final value. Budgets income items: rental as reviewed across the period (review leases, rental rebates given (-$) (incentive deeds, parking (review agreements, naming & signage, telecoms income, all other income. Income from: outgoings, cleaning, after hours air con, utilities etc. Income budget example: to effectively budget for income: Speak to leasing agents re market and confirm expected downtime (aka let up periods) with owner (post lease expiry);
