Question
Problem 10-11 Refer to the highest and best use analysis in table below. Use (a) Year 1 NOI (b) ( r g ) (c) R
Problem 10-11
Refer to the highest and best use analysis in table below.
| Use | (a) Year 1 NOI | (b) (rg) | (c) R | (ac = d) Implied Property Value (PV) | (e) Construction Cost of Building | (d) (e) Implied Land Value(Residual) |
|---|---|---|---|---|---|---|
| Office | $ 518,000 | 0.130.03 | 0.10 | $ 5,180,000 | $ 4,000,000 | 1,180,000 |
| Retail | $ 618,000 | 0.120.04 | 0.08 | 7,725,000 | $ 6,750,000 | 975,000 |
| Apartment | $ 423,000 | 0.120.03 | 0.09 | 4,700,000 | $ 3,000,000 | 1,700,000 |
| Warehouse | $ 418,000 | 0.100.02 | 0.08 | 5,225,000 | $ 4,000,000 | 1,225,000 |
Required:
Suppose that the warehouse income would grow at 3 percent per year instead of 2 percent.
a. Does this change the highest and best use of the site?
multiple choice
Yes
No
b. What is the new implied land value? (Do not round intermediate calculations. Round your final answer to the nearest dollar amount.)
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Emotions In Finance Booms Busts And Uncertainty
Authors: Jocelyn Pixley
2nd Edition
1107633370, 978-1107633377
