ANGUS CARTWRIGHT Harvard Case Solution & Analysis

INTRODUCTION:

Angus Cartwright (AC) Jr., is a professional investment advisor, who is currently considering the views of the 2 family members of his highly valuable client named Deright family. The 2 family members named John Deright and Judy Deright are currently considering to diversify their investment portfolio in such a way that the overall return on their investments could be optimized.
John has recently sold his business in an exchange of company’s stock that worth approximately $6million, in a view that he would live his life comfortably on $200,000 on stock plus other income of equal amount. Later he decided to optimize its return by diversifying its current investment portfolio from company’s stock towards investing in real state.

Judy’s main source of income is from the small sized chemical company of which she is the President as well as the sole stock holder. In the last 5 years she had earned a surplus of $800,000 before taxes as well as $550,000 after taxes. She also decided to diversify her investment portfolio in order to optimize the overall return on her investments. She is considering to allocate her accumulate investment of approximately $3500000 which she had invested in short term securities in any potential venture in order to get better returns on her investment.

John and Judy are currently considering investing in real estate as they are of the view that it would provide them with their desired rate of return of 12% after tax. In addition to this, they want a huge property in order to attract real estate.

PROBLEM STATEMENT:

How could the data in the exhibits could effectively be utilized to calculate the rate of return on the investment in order to determine the viability of the project?

4P ANALYSIS OF PROPERTIES:

In order to comprehensively analyse the profile of the available properties 4P analysis has been made.

Alison Green:

Place: Alison Green is located in Montgornery Country, Maryland.

Price: Available at a price of $ 4.6 million, but it is estimated that the broker could convince the seller of the property at $4.4 million.

Product: It has been operated at 97% occupancy since its inception, as well as, the property is a residential property comprising of 100 units garden apartments.

Promotion: The property is solely promoted through broker’s channel.

900 Stony Walk:

Place: Located in Montgornery Country, Maryland.

Price: Available at a price of $ 3.9 million, but it is estimated that the broker could convince the seller of the property at $3.75 million.

Product: It is a commercial property, constructed on 40000 square foot as well as it is a five story building.

Promotion: The property is solely promoted through broker’s channel.

Ivy Terrace:

Place: The property is located in Arlington Virginia.

Price: Available at a price of $ 3.7 million, but it is estimated that the broker could convince the seller of the property at $3.6 million.

Product: It has been operated at 95% occupancy since its inception, as well as, the property is a residential property comprising of 80 units garden apartments.

Promotion: The property is solely promoted through broker’s channel.

Fowler Building:

Place: The property is located in Arlington Virginia.

Price: Available at a price of $ 4.9 million, but it is estimated that the broker could convince the seller of the property at $4.7 million.

Product: It is a commercial property and a two story building as well as it is constructed on 45000 square foot, of which only 38000 square feet is rentable as the rest of the property is under construction.

Promotion: The property is solely promoted through broker’s channel.............................

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