Use an annual proforma for an appraisal valution of the property below. Quote your answer to the nearest $1,000. You are appraising an office property that consists of a total of 15,000 sqft of rentable space, split equally accross two floors. Assume a holding period of 5 years, and that the property will sell at a cap rate of 8% at the end of year 5, with selling expenses of 6% of the gross price. You find 5 rent comparables, top floors renting for $1.63, $1.67, $1.33, $1.50, and $1.55/sqft/month, and bottom floors for $1.95, $1.88, $1.52, $2.01, and $1.76/sqft/month. Based on the lease adjustments you had to make to arive at these values, you decide to weight these by 25%, 25%, 20%, 15%, and 15%, respectively, for both top and bottom floors. For subsequent years 2, 3,..., you expect market rents to rise by inflation, 2.5% per year. Typical comprable office space in your market runs at a vacancy and collection loss rate of 17% of PGI. You are renting cell tower space on the roof for $4,000/yr, with a one-time jump of 20% in year 3, and growing at inflation each year thereafter (4, 5, ...). Fixed expenses and reserves will grow 5% per year. For year 1, these expenses are: RE taxes: $40,000; insurance: $8,000; CapEx: $9,000. Variable expenses are a fraction of effective gross income: 5% for maintenance, 1% for janitorial, 3% for utilities, 10% for management, 1.5% for leasing commissions, and 1% for TI. Comprarable properties sell at a 11% discount rate.