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We also know that there are no industrial lots in developed <br /> 40• parks available with U.S. Highway 10 frontage. <br /> 41 Given these facts, we conclude that a 5 year absorption period <br /> is reasonable for the subject property. <br /> 11 RANGE OF VALUE: <br /> Every effort has been made to refine the data to its most <br /> reliable point. Obviously, there exists a potential for error <br /> due to the projections made based on present market conditions. <br /> If the sell-off period is lengthened there might be a decline <br /> in net present value although this could be offset by higher <br /> 11 prices. The selling price of the lots could vary from the <br /> projections. <br /> Selection of the discount rate of return is also a key element <br /> in the discounted cash flow analysis. We have selected 10.5% <br /> to be representative of the market because it includes the <br /> typical 4% over the current acceptable rate for longer term <br /> safe investments and an additional 2% for added risk because of <br /> the nature of this particular project. We believe that the <br /> project warrants an additional risk factor because the Business <br /> Park concept is new to the Elk River market and restrictions <br /> for improvements are considerably tighter then in a traditional <br /> industrial park. A change in the discount rate would cause the <br /> 11• value estimate to vary. <br /> We remind the reader that the estimate of value considers the <br /> entire 34 acre parcel sold as raw land to one buyer at one <br /> point in time. <br /> In the following grid we have illustrated the cash flow pattern <br /> and the indicated total net present value of the combined cash <br /> flows. <br /> 11 <br /> I <br /> • <br /> 29 <br />