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ANSWER ASAP PLEASE (will upvote) A 15-unit apartment building in Cambridge, Massachusetts was acquired for $9,000,000 with a 70% LTV purchase money mortgage at a
ANSWER ASAP PLEASE (will upvote)
A 15-unit apartment building in Cambridge, Massachusetts was acquired for $9,000,000 with a 70% LTV purchase money mortgage at a 4.125% annual interest rate fully amortizing over 30 years. The new owner substantially improved the building, carefully renovating the exterior and interior. She also implemented several environmentally friendly cost-saving measures, including the installation of solar panels on the roof, that saved energy and reduced operating expenses. After two years, these upgrades and improvements led to a substantial increase in the property's NOI to $607,500 from an NOI of $562,500 at the time of the acquisition. What was the acquisition cap rate? \begin{tabular}{l} \hline 4.125% \\ \hline 6.25% \\ \hline 8.5% \\ \hline 6.75% \\ \hline \end{tabular}Step by Step Solution
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