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Ann is looking to buy an office building in 2014. She plans to rent it out for 5 years (2015-2019) and sell it at the
Ann is looking to buy an office building in 2014. She plans to rent it out for 5 years (2015-2019) and sell it at the end of 2019.
Given:
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Asking cap rate 2014: 6.50% | |
2015: | |
Rental Income | $3,300,000.00 |
Parking | $65,000.00 |
Potential Gross Income (PGI) | $3,365,000.00 |
Vacancy Expenses | $79,200.00 |
Collection losses | $67,300.00 |
Effective Gross Income (EGI) | $3,218,500.00 |
Operating Expenses | $1,512,695.00 |
Net Operating Income (NOI) | $1,705,805.00 |
Question:
1. If this building is being sold in 2014 at an asking cap rate of 6.50%, what is the asking price?
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