AboutMike Fortunato Expertise Can answer questions on all aspects of commercial real estate management, including lease administration, eviction issues, financial reporting and budgeting, asset valuation/enhancement, marketing & leasing, and site maintenance and repairs. 20+ years of real estate management.
Experience 20+ years in commercial management. Current own and operate property management company in southern California.
Question What is the best way to determine the present value/worth of the income stream created by a long term (49 years) land lease having annual increases during the first 5 years and then increases at each 5 year anniversary thereafter. I have been stymied trying to do NPV & PV for the income stream on Excel because the NPV formula limits the periods to 29 and the PV formula requires all inflows to be equal. I can accomplish it on my HP-12C calculator, but would like to present it to a prospect on a spreadsheet. Thanks for any help you can provide.
Jim
Answer I believe you will probably need to create a custom spreadsheet to accomplish that, if your goal is to show the calculations (rather than simply be satisfied with the value that your HP-12C provides). You can probably accomplish that in Excel, and you may even be able to search the Web for someone who already has a template for NPV that is flexible enough to modify for your purposes.
