A property is leased on a net basis for $40,000 per year although market rents are currently $50,000 per year and expected to increase at 3% per year. The property is expected to be sold at the end of year 5 based on a 7 % terminal cap rate applied to the year 6 NOI. The current lease on the property will expire at the end of year 5 so the property can be leased in the 6th year at market rates. What is the cash flow the owner of the leased fee interest would receive in period 5 from the sale of the building? Please round your answer to the nearest whole number. Question 12

Select one: a. $693,764 cross out b. $828,053 cross out c. $665,787 cross out d. None of the above