Consider the following pro forma for the next 4 questions
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.	$ 1,500,000
Less Vacancy Allowance (average 8%)	$ (120,000)
Effective Gross Income	$ 1,380,000
Cleaning expenses (5% of EGI)	$ (69,000)
Insurance ($ 0.02 per dollar replacement cost @ = $40 pft)	$ (80,000)
Management & Maintenance (11% of EGI)	$ (151,800)
Reserve for Replacement (given)	$ (50,000)
Property Taxes (given)1	$ (4,000)
	$ (354,800)
Estimated Net Operating Income	$ 1,025,200

22 The purchase price today is 9,500,000, what is the cap rate?

23. We are planning to own this property for 5 years. Rents are projected to grow at 2% per year, vacancy is expected to remain constant at 8% for the first 3 years then jump to 10% in year 4 and remain at that level into the future, insurance will increase 2% per year and the rest of the expenses are as described. What is the NOI in year 5?

24 If the terminal (ending) cap rate is projected at 10% what is the expected selling price of the property at the end of the holding period?
25 What is the NPV of this investment at a discount rate of 12% (use the purchase price from question 22?