BIC also likes the idea of a development project and is considering the purchase of some raw land. A lot that is currently undergoing a change in zoning can support either an office building or a retail complex. Based upon market data, BIC has made the following estimates:

	Office	Retail
Rentable square feet	100,000	80,000
Rents per square feet	$24.00	$30.00
Operating expense ratio	40%	45%
Average growth in NOI per annum	1.5%	1.5%
Required total return	11%	12%
Total construction cost per square foot	$100	$86

A) Which is the best investment option and why?

B) Should they purchase the land if the negotiated purchase price is $5,500,000?