1. 35 Points You are a financial advisor to the family office of a well known hand surgeon who needs space to expand his practice. The perfect building is for sale. It is at 6050 S. Dixie Highway and the seller is asking $3.5 million for the building, which has 5,000 square feet of rentable space and is on a 10,000 square foot lot with six parking spaces. The doctor thinks he can borrow $2.5 million of the purchase price at an annual rate of 3% with 30 year amortization. The doctor can also lease 5,000 of space in a nearby office tower, with parking, for $25 per square foot under a triple net lease. The doctor requires at least a 10% annual return on investments.

1. There are three vacant lots for sale near by. Pictures of the three and of the subject property are on the next page along with other pertinent information. Use the information and the pictures to decide on a price per square foot for the 10,000 square foot lot under the subject property and compute the building to value ratio, assuming the doctor buys the building for $3.5 million. Explain your logic in deciding what price per square foot to use based on the information given about land comps.