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A Real Estate firm is evaluating an office building using the income approach. The Real Estate firm has compiled the following information for the office
A Real Estate firm is evaluating an office building using the income approach. The Real Estate firm has compiled the following information for the office building. All information is on annual basis: Gross Potential Rental Income CHF350'000 Estimated vacancy and collection losses 4% Insurance and Taxes 26'000 Utilities 18'000 Repairs and maintenance 23'000 Depreciation 40'000 Interest on proposed financing 18'000 There have been two recent sales of office buildings in the area. The first building had a net operating income of CHF 500'000 and was sold at CHF 4million. The second building had a net operating income of CHF 225'000 and was sold for CHF 1.6 million. . A. Compute the Net operating income for the office building to be valued
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