QUESTION 19 A single tenant property has an in-place rent of $7.2M/Yr and operating expenses of $2.5M/Yr. Based on market levels, the rent should be $7.0M/Yr. Assume a cap rate of 4%. By how much would a buyer over pay if they purchased the property based on the in-place rent? $5M $19M $1M $8M QUESTION 20 An existing building generates revenues of $10M and expenses of $3M. The prevailing cap rate for this property is 4%. Assume during due diligence that the buyer discovered that the roof needs to replaced at a cost of $3M. Assume that the seller agrees to an adjustment in price equal to the cost to replace the roof. What is the buyer's effective acquisition cap rate after getting a credit for the roof work? 4.0% 4.0296 4.07% 4.10%