Exercise 1: The Gilbert Building The Gilbert Building is a two story, 55,000 square foot office building with 50,000 sq. ft. of rentable space. It was recently completed in Madison, Missouri for a total development cost of $5 million. The building is 50% vacant. The building has a $3.5 million, 30 year, fully amortizing mortgage at an 8% interest rate. The debt service payments are approximately $25,682 per month or $308,184 per year. The gross revenues for the building are estimated at $20 per square foot per year. Operating expenses like heat, electric and insurance are estimated at $5.50 per sq. ft. of rentable space. Property taxes are $190,000 per year and the owner needs to fund a $10,000 structural reserve. 1. What does the set-up on this project look like at current occupancy rates? 2. How will the set-up for this building look when the building achieves 95% occupancy?