Question 5 (20 points) You are an appraiser of UWREC and are asked to appraise a 14,300-square foot Class B office building in the central business district of Dakar in 2021. You are given the following information to use in valuing the property: PGI $113,000 Vacancy 5% Operating Expenses Utilities $18,200 Repairs $5,600 Maintenance $18,600 Property Taxes $19,000 $5,100 Insurance Assumed Growth Rates Rental Income Repairs Property Taxes Insurance Utilities Equity Dividend Rate Loan Information Loan to Value ratio Mortgage Interest rate Loan amortization period 4% 6% 6% 4.50% 3% 16% 75% 10% 20 years a) Determine the overall capitalization rate using the band-of investment approach. b) Compute the value of the office building using the direct capitalization method. c) Determine the value of the office building using a before tax-discounted cash flow model. Assume that the expected selling price at the end of year 6 is 7.5 times the NOI. Selling expenses are expected to be 5% of sales price. Question 5 (20 points) You are an appraiser of UWREC and are asked to appraise a 14,300-square foot Class B office building in the central business district of Dakar in 2021. You are given the following information to use in valuing the property: PGI $113,000 Vacancy 5% Operating Expenses Utilities $18,200 Repairs $5,600 Maintenance $18,600 Property Taxes $19,000 $5,100 Insurance Assumed Growth Rates Rental Income Repairs Property Taxes Insurance Utilities Equity Dividend Rate Loan Information Loan to Value ratio Mortgage Interest rate Loan amortization period 4% 6% 6% 4.50% 3% 16% 75% 10% 20 years a) Determine the overall capitalization rate using the band-of investment approach. b) Compute the value of the office building using the direct capitalization method. c) Determine the value of the office building using a before tax-discounted cash flow model. Assume that the expected selling price at the end of year 6 is 7.5 times the NOI. Selling expenses are expected to be 5% of sales price