You are considering the following office building. The following information is available.

Asking price: $1.1 million

Rentable sq. ft: 12,000

Rent per sf $15/sf

Vacancy 7%

Miscellaneous Income $400/month

Operating expenses $58,000

Loan $880,000 based on an 80% LVR

Annual debt service: $88,000 assuming a 10% annual interest only loan

Cost Recovery claimed: $25,385 assuming a basis of 90% of property value

Investor tax rate: 36%

Your required rate of return 12%

Industry OER range 35%-40%

Current Market PGIM 8.0

Calculate:

a. ATCF