Refer to the highest and best use analysis in table below.

Use $($a$)$

Year $1$ NOI $($b$)$

$($r$$g$)($c$)$

R $($a$-$:c $=$ d$)$

Implied Property Value $($PV$)($e$)$

Construction Cost of Building $($d$)($e$)$

Implied Land Value$($Residual$)$

Office $ $520,0000\mathrm{.}130\mathrm{.}030\mathrm{.}10$ $ $5,200,000$ $ $4,000,0001,200,000$

Retail $ $620,0000\mathrm{.}120\mathrm{.}040\mathrm{.}087,750,000$ $ $6,750,0001,000,000$

Apartment $ $425,0000\mathrm{.}120\mathrm{.}030\mathrm{.}094,722,222$ $ $3,000,0001,722,222$

Warehouse $ $420,0000\mathrm{.}100\mathrm{.}020\mathrm{.}085,250,000$ $ $4,000,0001,250,000$

Required:

Suppose that the warehouse income would grow at $3$ percent per year instead of $2$ percent.

a$.$ Does this change the highest and best use of the site?

multiple choice

Yes

No

b$.$ What is the new implied land value?