Question
Assume the following on a $/SF basis: on the revenue side, rent 100. On the expense side, property taxes 12, insurance 8, utilities 4, maintenance
Assume the following on a $/SF basis: on the revenue side, rent 100. On the expense side, property taxes 12, insurance 8, utilities 4, maintenance 8, security 6, and management 5. Assume a prevailing cap rate of 5% and that the cash flows are in perpetuity. What is the value of the income stream to an owner in a gross lease scenario?
A. 1140
B. 1200
C. 1400
D. 2000
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Derivatives And Internal Models
Authors: Hans Peter Deutsch, Mark W. Beinker
5th Edition
3030229017, 9783030229016
