Question 5 8 pts JOSEPH recently purchased a two-story investment property with 5,000 SF of retail space and 5,000 SF of office space and 80 parking spaces. Monthly rents for retail space are $1.00/SF, while monthly rents for office space are $0.75/SF. Parking costs $125 per year per space. Vacancy in the market is 3%. The property operates with fixed expenses at 54% of effective gross income with no variable expenses. The overall capitalization rate was extracted from the following sales: (Note - EGI means Effective Gross Income) Sale Price Gross Income Vacancy Fixed Expenses Variable Expenses Return/Risk Reward 1 $ 500,000 $ 100,000 8% 30% of EGI $ 10,600 Riskier 2 $ 700,000 $ 120,000 11% 40% of EGI $ 864 Similar 3 $ 460,000 $ 100,000 5% 55% of EGI $ 1,425 Similar What is the value of the property? $ 560,001 - $ 580,000 $ 500,000 - $ 520,000 Less than $500,000 $ 520,001 - $ 540,000 $ 540,001 - $ 560,000 Question 5 8 pts JOSEPH recently purchased a two-story investment property with 5,000 SF of retail space and 5,000 SF of office space and 80 parking spaces. Monthly rents for retail space are $1.00/SF, while monthly rents for office space are $0.75/SF. Parking costs $125 per year per space. Vacancy in the market is 3%. The property operates with fixed expenses at 54% of effective gross income with no variable expenses. The overall capitalization rate was extracted from the following sales: (Note - EGI means Effective Gross Income) Sale Price Gross Income Vacancy Fixed Expenses Variable Expenses Return/Risk Reward 1 $ 500,000 $ 100,000 8% 30% of EGI $ 10,600 Riskier 2 $ 700,000 $ 120,000 11% 40% of EGI $ 864 Similar 3 $ 460,000 $ 100,000 5% 55% of EGI $ 1,425 Similar What is the value of the property? $ 560,001 - $ 580,000 $ 500,000 - $ 520,000 Less than $500,000 $ 520,001 - $ 540,000 $ 540,001 - $ 560,000