A single tenant property has an in-place rent of $6M/Yr and operating expenses of $2.5M/Yr. Based on market levels, the rent should be $5.5M. The existing tenant has a month to month lease (meaning the landlord would have to release the space at the market rent if the tenant opts not to renew). Assuming a cap rate of 4%, what is a the price for the asset based on market levels?

A

$87.5M

B

$85M

C

$75M

D

$72M