Question

In: Accounting

Calculate the NOI of a property based upon the information provided below: Building area:                         10,500...

Calculate the NOI of a property based upon the information provided below:

  • Building area:                         10,500 sqft
  • Average base rents:                $26.00 psf
  • NNN recoveries:                      $3.50 psf
  • Vacancy rate:                          5.0%
  • Operating expenses                $4.25 psf
  • Percentage rent                      $4,000 per year
  • Concessions                             3.0%
  • Annual debt service                $188,400 per year

Solutions

Expert Solution

Net Operating Income
a) Gross Income (10,500sqft * $ 26psf - 3%)     264,810.00
b) Vacancy Expense (10,500sqft * 5%)       13,240.50
c) Effective Rental Income (a-b) 251,569.50
d) Other Income (10,500sqft * $ 3.50psf)       36,750.00
e) Gross Operating Income (c+d) 288,319.50
f) Operating Expenses (10,500sqft * $ 4.25 ps       44,625.00
g) Net Operating Income (e-f) 243,694.50
Note: Annual Debt Service should not be included in calculculation of Net Operating Income as it is specific to the owner

ekkarill92 answered 2 years ago
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