1. The table below is a simplified financial spreadsheet, with expected cash flows for a 10-unit retail property. The property was purchased at an entry cap of 7.9% in 2023.

Year	2024
Potential Base Rent	$3,406,300
Potential Gross Revenue	$3,984,000
Effective Gross Revenue	$3,496,000
Net Operating Income	$2,309,000
Cash Flow Before Debt Service	$1,317,000

1. Potential Gross Revenue (PGI) exceeds Base Rent. Explain two reasons this might occur.
2. Given the cash flows above, calculate expected Operating Expenses in 2024.
3. Compute the purchase price of the property based on the cap rate given.

If the property was originally listed for $28,000,000 was it over- or under-valued at this price compared to what it sold for?

1. 1. Do you think Plantation Plaza discussed in class is a Core Plus or a Value-Add property? Give at least two reasons to support your answer and explain?
   2. What is percentage rent? How does it benefit the landlord? What can the landlord do to help increase the amount of rent collected on this type of rental agreement?