The building is a 4 story office building with a gross square footage of 65,000 sqft. Replacement cost of the structure is $180 per sqft. The site has 30,000 sqft of paved parking as part of the 2.5 acres site. There are also12 lighting poles at a cost new of $6,000 each and a $20,000 (new) entry gate for the parking lot. Paving and striping costs for the lot are $2.00 per sqft. of pavement. Vacant land comps have shown that land is selling for $250,000 per acre.

The building was built 10 years ago, an inspection determine the effective age to be 15 years old with an economic life of 40 years. The paving has an economic life of 10 years and an effective age of 8 years old. The 5 year old entry gate has an economic life of 20 years, and actual age is the same as effective age. Light poles have an effective age of 4 years and an economic life of 12 years. Sampling the local market you have found that entrepreneurial return is 15% of building costs new and site improvements.

a. What is the value by the cost approach for the property new?

b. What is the current as is value by the cost approach? ( show your work)