Intangible and Tangible Asset
One written page and one excel document are required.
The attached article and link below are a real world example of how a corporate acquisition (Columbia Pictures by Coca Cola) which included a beneficial leasehold interest (through long term lease to Columbia for 50 years at a contract rate which was well below market), effectively an intangible interest in real estate, can be acquired to unify the leased fee and leasehold interests into a full bundle of rights, or fee simple interest. Then almost 40 years later, that same tangible interest can be sold to a new buyer for over $900 million.
Assignment:
In an excel document, what would the present value of the beneficial leasehold be from 1983 to 2020. Assume a weighted average cost of capital of 8% and 10%.
Explain how the lease fee interest, the leasehold interest, and then the future fee simple interest when the fixed lease expires in 2020 and how all that fits together.