Question
You are given the following information to estimate the value of this office building:
Owners Annual Income Statement
Potential Gross Rent $
Less: Operating & capital expenses
Power $
Heat
Janitor
Water
Maintenance
Capital expenditures
Management
Vacancy and collection losses at of potential gross income.
a Calculate the NOI of this property for
b Using a cap rate of what is the estimated value of this property using the Direct
Capitalization method?
c Estimate the market value of the following small office building using the Discounted Cash
Flow method, given the following information:
Holding period: years
Assuming that NOI grows by per year in the first years, then per year
thereafter
Terminal cap rate is estimated to be
Discount rate:
