You run the corporate real estate division of a life sciences company. Your firm wants to build a manufacturing facility in the Inland Empire, close to the laboratories at Caltech and USC and the offices in Downtown Los Angeles. You have identified 1835 Wright Avenue in La Verne as your top candidate. In order to evaluate this prospective investment, you download data to analyze the property from CoStar. You can find these data on Canvas in the PDFs labeled 1835 Wright Ave and Property Analytics." With the information below, you will prepare four pro formas to identify the best investment strategy. 1. First, consider the assumptions you will make for all four pro formas: The current annual rent for this submarket (note: focus only on 1-3 star properties) is given in the Property Analytics" for year 0. According to this report, the rent is forecasted to grow 7.5% in year 1, followed by 7%, 5%, and 3.5% in the subsequent yearsand 3.0% all years thereafter. (Even though you are purchasing this property to use for your own manufacturing, the corporate real estate division will lease it out to the manufacturing division. So you treat it as a rental property.) The current vacancy rate for this submarket is also given in the "Property Analytics" report. This vacancy rate is not forecasted to change for the foreseeable future. You conservatively forecast operating expenses at 40% of EGI. In the first year of operations, you will need to invest $1 million to fit out the space with the equipment needed for manufacturing your products. In all the other years, you will set aside $100,000 annually for updating the plant and equipment The market cap rate is given in the "Property Analytics report. This cap rate is not forecasted to change over the foreseeable future. You assume that you will sell the property after 6 years, at which point you will incur selling expenses equal to 6% of the resale price. You run the corporate real estate division of a life sciences company. Your firm wants to build a manufacturing facility in the Inland Empire, close to the laboratories at Caltech and USC and the offices in Downtown Los Angeles. You have identified 1835 Wright Avenue in La Verne as your top candidate. In order to evaluate this prospective investment, you download data to analyze the property from CoStar. You can find these data on Canvas in the PDFs labeled 1835 Wright Ave and Property Analytics." With the information below, you will prepare four pro formas to identify the best investment strategy. 1. First, consider the assumptions you will make for all four pro formas: The current annual rent for this submarket (note: focus only on 1-3 star properties) is given in the Property Analytics" for year 0. According to this report, the rent is forecasted to grow 7.5% in year 1, followed by 7%, 5%, and 3.5% in the subsequent yearsand 3.0% all years thereafter. (Even though you are purchasing this property to use for your own manufacturing, the corporate real estate division will lease it out to the manufacturing division. So you treat it as a rental property.) The current vacancy rate for this submarket is also given in the "Property Analytics" report. This vacancy rate is not forecasted to change for the foreseeable future. You conservatively forecast operating expenses at 40% of EGI. In the first year of operations, you will need to invest $1 million to fit out the space with the equipment needed for manufacturing your products. In all the other years, you will set aside $100,000 annually for updating the plant and equipment The market cap rate is given in the "Property Analytics report. This cap rate is not forecasted to change over the foreseeable future. You assume that you will sell the property after 6 years, at which point you will incur selling expenses equal to 6% of the resale price