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You are a real estate mogul considering a three - year investment in an office property project. Your analysts have located a property in the
You are a real estate mogul considering a threeyear investment in
an office property project. Your analysts have located a property in
the city. You are provided with the following information:
You can buy the building today for million without borrowing.
The building's gross leasable area is square feet.
You anticipate that the market rent will be sqft pa in the
coming year, with rent growth of per year thereafter.
The office building's vacancy allowance is of potential gross
income.
The operating expenses will be of the net gross income.
You estimate that the goingout exit cap rate at the end of
year EOY will be
The required rate of return discount rate is pa
Ignore transaction cost.
a Given the table below, what is the net operating income of the
office building in each year?
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