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Income Capitalization. Complete the following (5pts). $25.00 Net Lease Rates, Suburban ($/sflyr) Total Building Area (sf) Pot
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Answer #1
Net lease rates, Suburban ( $/Sf/yr) 25
Total building area (sf)              35,000
Potential gross income ($/yr)          875,000 =25*35000
Income/Revenue ratio 0.55
Net operating Income ( $/yr)          481,250 =875000*0.55
Capitalization rate 10%
Total Project value        4,812,500 =481250/10%
Land acquisition Cost           612,500
Total Building budget        4,200,000 =4812500-612500
Total building area (sf)              35,000
Maximum Construction cost ( $/sf)                   120 =4200000/35000
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