Given the following owner's income and expense estimates for an apartment property, formulate a reconstructed operating statement. The building consists of 10 units that could rent for $2,200 per month each. Estimating vacancy and collection losses at 5 percent of potential gross income and assuming an above-line treatment of CAPX.

Expenses & capital expenses

Power $8,800 Heat $6800 Janitor $18,400 Water $14,800 Maintenance $19,200 Reserve for capital expenditures $11,200 Management $12,000 Tax depreciation $20,000 Mortgage payments $25,200

a) Reconstruct the operating statement to obtain an estimate of NOI.

b) Using the NOI and a cap rate of 5.5 percent, calculate the property's indicated market value.