Financial Feasibility

• You are analyzing an office building to determine if it makes financial sense to build. Market rents are $11 per square foot. The building and site improvements cost $145; the investor requires a 6 percent return. If market vacancy and credit loss is 5 percent and expenses are 15 percent of EGI, do you move forward with the project? A yes or no answer is insufficient, you have to back into the PGI.