Angus Cartwright Case

The Angus Cartwright case is based on two different finical situations for two separate investors. The first investor is John DeRight. John has recently sold his business for 18 million dollars in stock which pays a 500k dividend and thus has retired. Due to the fact that he is retired and potentially on a fixed income, I consider him to be more risk averse and needs to find a building that can shelter some of his income.

Based on Financial Analysis I believe that Allison Green would be the correct property for John DeRight. Due to his financial situation the Ivy Towers and Fowler Building present to much risk. The reason why Allison Green is attractive is due to the fact that it has high stable cash flows operating at 95% occupancy. This high occupancy lowers John risk for the investment. He also has a low break even at 64.84% which also lowers his risk for defaulting or loosing money on this investment.

Judy DeRight is in a different situation than John, as she owns a successful chemical company that earns $1.1 million after taxes. She has also accumulated 16 million dollars in short-term securities in her personal portfolio. This Gives her more incoming potential, and the capability to invest in riskier investments. I believe her best option is for her to invest in Stony Walk. Stony Walk has the highest operating returns with a 95% occupancy. It also has high income tax shields compared to the other properties . There is also the a hidden potential for Judy to move her Chemical company to the building or if she did decide to sell it has a strong final sale price. All of these factors lower her risk and give her a potential for a higher rate of return.