3. Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently zoned for agricultural use. If purchased, however, Acme must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study, Acme has made estimates for the two uses that it deems possible, that is, Page 337 office or retail. Based on its estimates, the land could be developed as follows: Office Retail Renlable square feet 100.000 80.000 Rents per square foot $24.00 $30,00 Operating expense ratio 40% 50' Avg. growth in NOI per annum 3% 39 Required return (1) 13% 14% 3 Total construction cost per square foot S100 S100 Which would be the highest and best use of this site? 3. Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently zoned for agricultural use. If purchased, however, Acme must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study, Acme has made estimates for the two uses that it deems possible, that is, Page 337 office or retail. Based on its estimates, the land could be developed as follows: Office Retail Renlable square feet 100.000 80.000 Rents per square foot $24.00 $30,00 Operating expense ratio 40% 50' Avg. growth in NOI per annum 3% 39 Required return (1) 13% 14% 3 Total construction cost per square foot S100 S100 Which would be the highest and best use of this site