Brossard Investment Company is considering the purchase of the Apartment South project. Next year$$s NOI and cash flow is expected to be $$2,000,000,$ and based on Brossard$$s economic forecast, market supply and demand and vacancy levels appear to be in balance. As a result, NOI should increase at $4$ percent each year for the foreseeable future. Brossard believes that it should earn at least a $13$ percent return on its investment.

a$.$ Assuming the above facts, what would the estimated value of the property be now?

b$.$ What going$-$in cap rates should be indicated from recently sold properties that are comparable

to Apartment South?

c$.$ Assuming that in part $($a$)$ the required return changes to $12$ percent, what would the value be now? d$.$ Assume results in part $($c$).$ What should the investor now be observing regarding the price

of comparable sales? What market forces may be accounting for the differences in value

between $($a$)$ and $($c$)?$