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Angus Cartwright III Case Solution

Solution Id Length Case Author Case Publisher
2389 622 Words (3 Pages) Kenneth J. Hatten, William J. Poorvu, Howard H. Stevenson, Arthur I Segel, John H. Vogel Harvard Business School : 375376
This solution includes: A Word File A Word File and An Excel File An Excel File

Angus Cartwright is considering various real estate investment opportunities to advise his clients which include John DeRight and Judy DeRight. The four properties are currently under consideration two of which are located in Montgomery County, Maryland, and the other two are located in Arlington, Virginia. The properties include Alice Green (an apartment building), 900 Stony Walk (an office building), Ivy Terrace (an apartment building) and The Fowler Building (an office building).

Following questions are answered in this case study solution

  1. Investment suggestion for John DeRight and Judy DeRight

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Case Analysis for Angus Cartwright III Case Solution

The objective of evaluating the investment which is best suitable to clients adding maximum value and generating a higher return than their required rate of return of 12%. In this regards, various financial indicators have been calculated present in the various exhibits of the case study. 

Exhibit 1 shows that the most expensive property is 900 Stony Walk which amounts to $11.5 Million however the equity requirement is not the highest since an $8 Million mortgage is available to finance this property. Moreover, the same property also generates the highest gross rent among all as evident by exhibit 2. The before-tax cash flows suggests that the other operating expenses for 900 Stony Walk is substantial thereby reducing the before-tax cash flows. The before tax cash flow may be an important factor in evaluating the investment which indicates that the Alison Green is able to generate the highest before tax cash flows. Although it has real estate taxes of 12% which is higher than that of Ivy Terrace and The Fowler Building though they have a lower occupancy rate. 

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