Question
Bob wants to buy a building. He computes the annual NOI for the following year to be $260,000. The seller's asking price for the building
Bob wants to buy a building. He computes the annual NOI for the following year to be $260,000. The seller's asking price for the building is $4,800,000. Bob finds a similar building nearby which sold for $5,000,000 last year and had an NOI of $275,000. If Bob thinks the building he wants to buy should sell at the same cap rate as the similar building, how much should Bob offer?
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077647094
