Based on what was reviewed in class, please submit a BOE analysis for the multi tenant retail center based on the information below. Please determine the Net Operating Income of this property. Also, what price would you pay for this property, if you wanted to achieve a 5% Cap Rate (Capitalization Rate)? NOTE: Common Area Maintenance (CAM) paid by tenants are $0.67 Per Square Foot, Per Month. Assume 5% Vacancy Rate. BOE Analysis - Assignment.png
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- What would be the total fire insurance premium for Best Hardware if their $625,000 building belongs in structural classification B? The contents are worth $250,000 and they received an area rating of 1. Use Table 19-4. Round your answer to the nearest cent. A. What is the annual premium for the building? B. What is the annual premium for the contents?Zenith Investment Company is considering the purchase of an office property. It has done an extensive market analysis and has estimated that based on current market supply or demand relationships, rents, and its estimate of operating expenses, annual NOI will be as follows: Year NOI 1 $ 1,030,000 2 1,030,000 3 1,030,000 4 1,210,000 5 1,260,000 6 1,310,000 7 1,349,000 8 1,389,170 A market that is currently oversupplied is expected to result in cash flows remaining flat for the next three years at $1,030,000. During years 4, 5, and 6, market rents are expected to be higher. It is further expected that beginning in year 7 and every year thereafter, NOI will tend to reflect a stable, balanced market and should grow at 3 percent per year indefinitely. Zenith believes that investors should earn a 12 percent return (r) on an investment of this kind.Required: a. Assuming that the investment is expected to produce NOI in years 1 to 8 and is expected to be owned for…You are considering buying an old warehouse that you will convert into anoffice building for rental. Assuming that you will own the property for 10 years, how much would you be willing to pay for the old house now given the following financial data?I. Remodeling cost at period 0 = $550,000;II. Annual rental income = $800,000;Ill. Annual upkeep costs (including taxes)= $80,000;lV. Estimated net property value (after taxes) at the end of 10 years = $2,225,000;V The time value of your money (interest rate)= 8% per year.(a) $4,445,770(b) $5,033,400(c) $5,311,865(d) $5,812,665
- Sky High Partners is evaluating a high-rise office building to add to its investment portfolio. To calculate a value, Sky High plans to use the income approach, based on the following estimates: Gross potential yearly rental income Estimated vacancy rate Yearly operating costs Market capitalization rate a. Compute the net operating income (NOI) for the building. Net operating income $ Valuation $ 890,000 2.75% $ 417,000 14% 448,525 b. Using the income approach, calculate the value for the office building. Note: Round your answer to the nearest whole number.Determine the best course to take next quarter, using the following criteria. a. Maximaxb. Maximin 2. The owner of the Columbia Construction Company must decide between building a housing development, constructing a shopping center, and leasing all the company's equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable or increase. The profit from each alternative, given the two possibilities for material costs, s shown in the following payoff table: Material Costs Decision Stable Increase $70,000 105,000 Houses $30,000 20,000 40,000 Leasing 40,000 Determine the best decision, using the following decision criteria. a. Maximax b. Maximin c. Minimax regret d. Hurwicz (a = .2) e. Equal likelihood %3D 3. A local real estate investor in Orlando is considering three alternativeBased on my understanding, the operating process in a property developer starts from:a. Setting up budget to identify potential selling price per unit to achieve favorable profit margin and performing market research on the targeted areab. Once the project is finalized and approved by local authorities, we could start to market out the properties, even though it is at preliminary stagec. Prepare Sales & Purchase Agreement and sign with potential customers through collection of first 10% refundable depositd. Bill purchasers progressively based on approved architect certificatese. Handover key to purchasers after the project is completed Assuming that we are only selling bare units with no other features provided to our purchasers, explain the five steps approach to recognize revenue for property developers in accordance with IFRS 15 Revenue from contract with customers.
- Scenario: You purchase... 10 acres of bare ground in an area zoned commercial/office. Streets and utilities are in the street. The price paid is $6 per square foot. Holding time: 5 years. If you want a: (a)15% annual return on your land, what will you have to sell the land for in 5 years? (Per square foot, not including any costs) (b) for a 15% total return? (per square foot, not including any costs)Consider the following:purchase of an office building worth P1M from unrestricted funding. Currently, the office building is on a 2 year lease, with rentals of BWP 22000 per month. Provide for recommendations to the finance manager. What what would be the possible effect on the financial health of the organization, if these transactions are approved?You are considering buying an old warehouse that you will convert into anoffice building for rental. Assuming that you will own the property for 10 years, how much would you be willing to pay for the old house now given the following financial data?(i) Remodeling cost at period 0 = $550,000;(ii) Annual rental income = $800,000;(iii)Annual upkeep costs (including taxes)= $80,000;(iiii) Estimated net property value (after taxes) at the end of 10 years =$2,225,000;(iiiii)The time value of your money (interest rate)= 8% per year.(a) $4,445,770(b) $5,033,400(c) $5,311,865(d) $5,812,665
- Calculate how much money a prospective homeowner would need for closing costs on a house that costs $237 comma 500237,500. Calculate based on a 2121 percent down payment, 1.21.2 discount points on the loan, a 0.60.6 point origination fee, and $1 comma 8301,830 in other fees.Assuming that you would like to buy an equipment for your small business. Using the information below, calculate the Rate of Return and the Pay Back Period for the investment. After presenting your calculations, explain why you think this will (or will not) be a good investment. Here are the numbers: Cost of the investment is $100,000 Estimated depreciable life of investment is 5 years Annual depreciated charge is $15,000 Estimated average profit over depreciable life is $10,000.please solve with formulas like (F/P, 5% , n) not with the excell. D.1. Your client asks you to check on the feasibility of constructing an apartment house with data as follows: current income $100,000/yr gradient increase in income $ 10,000/yr/yr current costs $ 60,000/yr gradient increase in costs $ 5,000/yr/yr %3D The resale value is expected to equal the current construction costs now, escalating at a rate of 2 percent per year compounded until resale in 10 years. What can he afford to construct the apartments for now if he requires a 20 percent return on investment? (Ans. P $289,000)