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Consider a 2 0 0 , 0 0 0 SF office building complex, with NOI of $ 2 5 / SF / year with rents
Consider a SF office building complex, with NOI of $SFyear with rents and operating expenses paid in arrears at the end of the year annually, and no capital expenditures.
The rent will increase by per year. The discount rate is year
a What is the value of this office building, assuming that the building is sold at the end of
year and the cap rate at that time is expected to be What is the cap rate at time
b What is the value of this office building, assuming that the building will be held and
rented indefinitely perpetually What is the implied cap rate at time
c What is the value if the rents are paid in advance at the beginning of the year and the
building is rented perpetually?
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