Total absolute net lease or NOI = Total square feet * Absolute
net lease per foot
= 30,000 * $22
= $660,000.
Property value under sale and leaseback = NOI / Cap rate
= $660,000 / 0.06
= $11,000,000.
Price they can expect for property value = $11,000,000.
Question 6 10 pts A major retail company plans to build 30,000 square building that would...
Question 7 10 pts A national retailer uses 27,500 SF of "big box" store space and develops these properties for an average cost of $4.5 million. The space leases for $22 per foot (absolute net) with $5 per foot in operating expenses. If the company does a sale-leaseback, what is the approximate price (rounded to thousands) they can expect to get if the property is sold at a 6.25 cap rate? $11,880,000 $ 5,520,000 $ 7,920,000 $6,828,000 $ 9,680,000
Question 5 10 pts An investor is considering the purchase of an office building for $2.5 million. The 20,000 square foot property rents for $20 a foot with a 5% vacancy rate, and operating expenses at 30% of EGI. What is the (going-in) cap rate? 8.23% 9.75% 8.91% 10.64% 9.57% 10 pts
Question 5 10 pts An investor is considering the purchase of an office building for $2.5 million. The 18,000 square foot property rents for $20 a foot with a 5% vacancy rate, and operating expenses at 30% of EGI. What is the cap rate? 8.23% 9.75% 8.91% 10.64% 9.57%
Question 8 10 pts Suppose that your 12,000 SF building was leased for $10 per square foot two years ago on a five-year lease (i.e. three years remaining). Your tenant wants to negotiate a buyout (.e., get out of the lease) but comparable space is now renting for only $8 per square foot. At what price should you allow the existing tenant to buyout the lease if your discount rate is 12%? e $57.644 $59,684 $61,850 $64,152 $66,602 10 pts
Question 3 10 pts H&R Block rents 3,000 square feet of an office building. Their lease started in 2014 at $16.00 per foot, with a $2/SF rent step in 2017. They have a full service gross lease with a $5.20 expense stop. If operating expenses are $6.60 in 2018, what is their effective rent in 2018? O 18.80 19.40 19.80 20.30 20.80 10 p Question 4 Question 3 10 pts H&R Block rents 3,000 square feet of an office building....
Question 9 10 pts A 22,000 square foot building sold for $2.6 million. The property rents for $17 a foot with a 3% annual rent increase, 5% vacancy rate, and operating expenses at 32% of EGI. What is the gross rent multiplier? 5.42 5.91 6.95 6.12 5.78 MacBook Pro
Use the following to answer questions 1-5: A local 20,000 square foot retail building is 100% occupied by a single tenant. The lease started last week and continues for 10 years. The rent is $7.00 per square foot per year. The landlord pays all the expenses associated with the building. The expenses total $2.00 per square foot per year, and we have determined that they are market-oriented. From a market survey, it is our opinion that 5% is a reasonable...
Seymour Clothing Co. manufactures a variety of clothing types for distribution to several major retail chains. The following costs are incurred in the production and sale of blue jeans: Required: Identify each cost listed below as variable costs, fixed costs, or mixed cost. a. Shipping boxes used to ship orders b. Consulting fee of $200,000 paid to industry specialist for marketing advice c. Straight-line depreciation on sewing machines d. Salesperson's salary, $10,000 plus 2% of the total sales e. Fabric...
10. The Candle Factory plans to open a new retail store in Saco, Maine. The store will sell specialty candles for an average of $10 each. The average variable costs per candle are as follows: • Wax $4 Other additives $2 • Base $1 The company is negotiating its lease for the new location. The landlord has offered two leasing options: Option A) a lease of $2,500 per month; or Option B) a monthly lease cost of $2.000 plus 10%...
question 9 and 10 Question 9 (10 points) Kramerica Industires plans to introduce a new product to the market. Last week, Kramerica hired a marketing firm to develop a TV ad for the product. The marketing firm will develop the ad regardless of Kramerica's decision to continue the project or not. The project will require additional working capital of $300,000 which will be recovered at the conclusion of the project. The firm has spent $250,000 on R&D for this project....