The property you are appraising is a five-story office building. Each floor has 10,000 square feet...

The property you are appraising is a five-story office building. Each floor has 10,000 square feet of rentable space and is suitable for single occupancy. Two tenants have leases. Floor 3 is occupied under a five-year lease with three years remaining. The current rental is $128,600 per year. Floor 4 is occupied under a new five-year lease and the rent is $150,000 per year. Floors 1, 2, and 5 are vacant. The rent being paid for the fourth floor is considered current market rent. The first floor is expected to bring a rent premium of 15% because of its visibility and commercial potential. The fifth floor is expected to bring a 10% premium because of its view. There is a strong demand for the space available in this building. Rent levels in the next five years are expected to increase 8% on an annual compounding basis as they have in the last two years. All future leases will be for three-year terms.

What is the total rent projected in year 1?

$766,100

$728,000

$809,000

4)	none of the above

Question 24

Based on the information in the above question (#23), what is the total rent projected for year 3?

$766,100

$728,000

$809,000

4)	none of the above

Again, using the information in question #23, what is the total rent projected for year 5?

$766,100

$728,000

$809,000

4)	none of the above

Solutions

Expert Solution

Peojected rent for year 1

1floor 15%primium form basic rent	172500
2nd floor consider basics rent	150000
3 rd floor	128600
4th at list floor assume basic rent	150000
5th floor 10 % primium form basic rent	165000
Toal	766100

Peojected rent for year 3

1floor 15%primium form basic rent	172500
2nd floor consider basics rent	150000
3 rd floor(1286001.081.08)	150000
4th at list floor assume basic rent	150000
5th floor 10 % primium form basic rent	165000
Toal	787500

d none of above

Peojected rent for year 5

1floor 15%primium form basic rent (1275001.081.08)	201204
2nd floor consider basics rent(150001.081.08)	174960
3 rd floor	150000
4th at list floor assume basic rent(1500001.081.08)	174960
5th floor 10 % primium form basic rent(1650001.081.08)	192456
Toal	893590

Option d none of these

jeff jeffy answered 1 year ago

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