You have been asked to calculate the Value of a 6,000 sq. ft. office building, currently renting at $ 11.75 per sq. ft. The Vacancy rate is 8.5% and next years Operating expenses are likely to be $ 31,500. In order to calculate the value of the building, you have found four recently sold similar properties:
1
2
3
4
COMPARABLE PROPERTIES
Sale Price
NOI/yr
$ 255,000 $ 22.500
$ 178,000 $ 17,000
$ 315,000 $ 27,500
$ 266,000 $ 18,660
W
According to your calculations, the Value of the Office Building is:
a. $ 386,375
b. $ 374,085
c. $ 345,608
d. $ 378,086
e. $ 470,525