Sammie's Club wants to buy a $320,000-$square$-$feet distribution facility on the northern edge of a large midwestern city. The subject

facility is currently renting for $$6\mathrm{.}0$ per square foot. Based on recent market activity, two properties have sold within a two$-$mile

distance from the subject facility and are very comparable in size, design, and age. One facility is $350,000$ square feet and is presently

being leased for $$5\mathrm{.}90$ per square foot annually. The second facility contains $300,000$ square feet and is being leased for $$6\mathrm{.}10$ per

square foot. Market data indicates that current vacancies and operating expenses should run approximately $50$ percent of gross

income for these facilities. The first facility sold for $$14\mathrm{.}2$ million, and the second sold for $$12\mathrm{.}7$ million.

Required:

a$.$ Using a going$-$in or direct capitalization rate approach to value, how would you estimate value for the subject distribution facility?

$($Do not round intermediate calculations. Round your final answers to $2$ decimal places.$)$

b$.$ What additional information would be desirable before the final direct rate $($R$)$ is selected? $($You may select more than one answer.

Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the

question mark to empty the box for a wrong answer.$)$

$?$ Property values

$?$ Financing

$?$ Risk