An investor is considering the purchase of an undeveloped land. It is currently zoned for agriculture use. If purchased however, the investor must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study the investor has made estimate for the two uses that it deems possible that is office or retail. Based on the estimate the land could be developed as follows: Office Rentable square feet 100,000 Rent per square feet Sh.24 Operating expense ratio 40%- Average growth in Nollp.a. 3% Required return 13% Total construction cost per sq. foot Shs.100 Retail 80,000 Sh.30 50% 3% 14% Sh.100 Required: Estimate value of the land using the highest and best use analysis. (25 marks) An investor is considering the purchase of an undeveloped land. It is currently zoned for agriculture use. If purchased however, the investor must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study the investor has made estimate for the two uses that it deems possible that is office or retail. Based on the estimate the land could be developed as follows: Office Rentable square feet 100,000 Rent per square feet Sh.24 Operating expense ratio 40%- Average growth in Nollp.a. 3% Required return 13% Total construction cost per sq. foot Shs.100 Retail 80,000 Sh.30 50% 3% 14% Sh.100 Required: Estimate value of the land using the highest and best use analysis. (25 marks)