Use an annual proforma for an appraisal valution of the property below. Submit one file (excel is by far the quickest wa
Posted: Sun Jul 03, 2022 1:06 pm
Use an annual proforma for an appraisal valution of the propertybelow. Submit one file (excel is by far the quickest way to dothis, though can use a word file), showing all work (use formulaein excel cells and show formulae explicitly if you use a worddocument). You must show work or risk losing points. Quote youranswer to the nearest $1,000.
You are appraising an office property that consists of a totalof 15,000 sqft of rentable space. Assume a holding period of 5years, and that the property will sell at a cap rate of 8% at theend of year 5, with selling expenses of 6% of the gross price.
Rent comparables indicate that an appropriate price per sqft is$1.83. For subsequent years 2, 3,..., you expect market rents torise by inflation, 2.5% per year.
Typical comprable office space in your market runs at a vacancyand collection loss rate of 17% of PGI. You are renting cell towerspace on the roof for $4,000/yr, with a one-time jump of 20% inyear 3, and growing at inflation each year thereafter (4, 5,...).
Fixed expenses and reserves will grow 5% per year. For year 1,these expenses are: RE taxes: $40,000; insurance: $8,000; CapEx:$9,000.
Variable expenses are a fraction of effective gross income: 5%for maintenance, 1% for janitorial, 3% for utilities, 10% formanagement, 1.5% for leasing commissions, and 1% for TI.
Comprarable properties sell at a 11% discount rate.
You are appraising an office property that consists of a totalof 15,000 sqft of rentable space. Assume a holding period of 5years, and that the property will sell at a cap rate of 8% at theend of year 5, with selling expenses of 6% of the gross price.
Rent comparables indicate that an appropriate price per sqft is$1.83. For subsequent years 2, 3,..., you expect market rents torise by inflation, 2.5% per year.
Typical comprable office space in your market runs at a vacancyand collection loss rate of 17% of PGI. You are renting cell towerspace on the roof for $4,000/yr, with a one-time jump of 20% inyear 3, and growing at inflation each year thereafter (4, 5,...).
Fixed expenses and reserves will grow 5% per year. For year 1,these expenses are: RE taxes: $40,000; insurance: $8,000; CapEx:$9,000.
Variable expenses are a fraction of effective gross income: 5%for maintenance, 1% for janitorial, 3% for utilities, 10% formanagement, 1.5% for leasing commissions, and 1% for TI.
Comprarable properties sell at a 11% discount rate.