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Suppose that the net operating income is actually $ 1 2 6 , 0 0 0 for year 1 because Mr . Laflin will have

Suppose that the net operating income is actually $

126, 000

for year

1

because Mr

.

Laflin will have to further adjust the rent roll to reflect the current market rental rate. If the NOI increases at a rate of

3 %

per year, what would be the projected net sale proceeds of the property at the end of a five year holding period? Assume that the going

-

out capitalization rate is

10 %,

and the selling expenses are

5 %

of the sale price.

(6

points

)

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