Q7.What is the NOI for Year 1?

Your company is considering making an investment in an apartment building. You will not use any debt (i.e. a mortgage) to buy the building (i.e. it will be all equity). The Purchase Price is $16,000,000 and Current Assessed Value is $15,750,000. The building has 40 two-bed room apartments and 25 three-bed room apartments. You assume that the monthly rent for two-bed room units is $2,000 and the rent for three-bed room units is $2,750. The building has 75 parking spaces. The charge for each of them is $125 per month. You plan to hold the building for 4 years. The projected information about the investment is as follows. Please construct the pro forma statement (round to dollars): Annual inflation of rents and parking charge Vacancy and collection loss as of PGI Parking Vacancy Allowance Land value as % of the total value Annual growth of assessed value in each of Years 2-5 6.0% Property tax mill rate Other Operating Expenses (% of EGI) Planned holding period Terminal cap rate (applied to 5th year's NOI) Selling cost as a % of Gross Sales Price # of Years for calculating Depreciation 3.5% 5.0% 20 35% 4 years 4.50% 2.0% 27.5