Problem Solving 1.COVID 19 CORPORATION must decide whether to invest in an apartment complex with 160 units. Of these, 100 lease for $850 per month while the remaining 60 units lease for $750 per month. The current market vacancy rate for similar apartment buildings is 8 percent, and Sheldon estimates the operating expense ratio to be 20 percent. Sheldon believes he can buy this property for $20 million. 25 POINTS

Required: a) Derive the pro-forma operating statement for this property and calculate net operating income (NOI).

b. Explain briefly what NOI measures

c). What is Sheldons going-in cap rate for this investment?