Mr. kebede is considering investing in a commercial office building in downtown Addis Ababa , kolfe keraniyo. The building has 140,000 square feet of gross leasable area. of this, 55,000 square feet rent for birr 22.50 per square foot, 65,000 square feet rent for birr 18.00 psf, while the remaining 20,000 square feet rent for birr15.25. All leases in this building are gross leases. Currently, the average vacancy rate for similar office space in Lafto is 12%. The asking price for this property is birr 10 million. based on the prior owner's past tax returns, kebede has forecasted the following expenses for the property.

Depreciation allowances 225,000, utilities 195,000, maintenance 215,000, management expenses 10% of of EGI. Mortgage interest 220,000, property insurance 155, 000, and property taxes360,000.

Questions

Write out the proforma operating statement for this property
What is its expected net operating income?
At what cap rate is the seller offering this property?