All questions relate to each other. Please answer all of them.
Question 3 (15 points) Construct an income proforma operating statement using the following information. It should show the following on a whole dollar basis: PGI (rental income and other income itemized), vacancy & collection loss, EGI, operating expenses, OER, and NOI. 64,000 SF warehouse Market rent is $9.25/SF with industrial gross terms. Industrial gross in this market means the landlord pays for taxes, insurance, and common area maintenance (CAM). Market vacancy in this market is 3.5%. Market collection loss is 0.5%. Operating expenses include: Insurance: $0.10/SF Real estate taxes: $2.75/SF CAM: $0.20/SF Management fee: 3% of EGI Replacement reserves: Based on a sinking fund factor for $195,000 in 7 years in an interest-bearing account with a rate of 4% (annual compounding). Develop a range of market cap rates through market extraction using the following data. Then, using the net operating income from question 3 and the range of cap rates you have calculated, present a range of applicable values for the property using the direct capitalization technique. NOI Sale price Sale A $261,000 $4,880,000 Sale B $243,000 $4,248,000 Sale C $187,000 $3,430,000 Sale D $403,000 $7,228,000 Vour anonor: Thinking back to highest and best use analysis, what does the difference between the value from your cost approach and the value from the income and sales approaches indicate about the subject property? Question 3 (15 points) Construct an income proforma operating statement using the following information. It should show the following on a whole dollar basis: PGI (rental income and other income itemized), vacancy & collection loss, EGI, operating expenses, OER, and NOI. 64,000 SF warehouse Market rent is $9.25/SF with industrial gross terms. Industrial gross in this market means the landlord pays for taxes, insurance, and common area maintenance (CAM). Market vacancy in this market is 3.5%. Market collection loss is 0.5%. Operating expenses include: Insurance: $0.10/SF Real estate taxes: $2.75/SF CAM: $0.20/SF Management fee: 3% of EGI Replacement reserves: Based on a sinking fund factor for $195,000 in 7 years in an interest-bearing account with a rate of 4% (annual compounding). Develop a range of market cap rates through market extraction using the following data. Then, using the net operating income from question 3 and the range of cap rates you have calculated, present a range of applicable values for the property using the direct capitalization technique. NOI Sale price Sale A $261,000 $4,880,000 Sale B $243,000 $4,248,000 Sale C $187,000 $3,430,000 Sale D $403,000 $7,228,000 Vour anonor: Thinking back to highest and best use analysis, what does the difference between the value from your cost approach and the value from the income and sales approaches indicate about the subject property
