You have learned that constuction costs for building a "new Rose Garden Apartment Complex" are estimated to be $100 per square foot of rentable area. If Rose Garden is accurately priced at $27,000,000 (A) what does this imply for its underlying land value (per acre)?

(B) Also, what if you do additional research and find that comparable unimproved land (14 acres) in the same submarket has recently sold for $6,000,000. What may this suggest for Rose Garden or for future real estate development in this market?

(C) What if recent comparable land sales were actually in the range of $3,000,000?

ROSE GARDEN APARTMENTS PART (A) Rose Garden Age Acres # Units Units per Acre Price Bedroom / Bathroom 1/ 1 1/ 1.5 2/2 3/2 Weighted Average Rentable Area Vacancy Operating Expense Gross Rent GIM Net Income(NOI) Cap Rate Wt. Avg Month Rent per SF(Year/Mo.) $12.86/$1.07 Price per Unit Price per SF 250 17.9 $Rent /# Units/SF 830/75/780 850/50/810 1,040/100/960 1,270 /25/1,180 962 / X/ 898 224,500 5% 40% $2,886,000 $1,645,000 $962