400 7th Street Rental Model
Financial Summary:
Annual Rental Income:
62 Units @ $50psf	$2,050,000.00
Less Vacancy Factor of	-$102,500.00
Effective Rental Income	$1,947,500.00
Annual Operating Expenses:
Property Tax	$255,000.00
Insurance	$50,000.00
Water & Sewer	$45,000.00
Elevator Maintenance	$12,000.00
Electric	$25,000.00
Repairs & Maintenance	$40,000.00
Reserves	$40,000.00
Telephone and Internet	$8,500.00
Supplies	$12,000.00
Management	$40,000.00
Legal & Accounting	$10,000.00
Janitorial	$18,000.00
Total Operating Expense	$555,500.00
Net Operating Income	$1,392,000.00

Suppose we expect the Net Operating Income to go up by 3, and suppose an investment with equal risk is expected to return 9%. What is the new value of the building?

		20,500,000
		23,896,000
		17,875,000
		29,450,000