Investors A and B are both considering an investment in a property with an expected NOI of
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Question:
Investors A and B are both considering an investment in a property with an expected NOI of $1.8M during the 1st year of the investment. Investor A is relatively small investor that does not own any other investments in his real estate investment portfolio while investor B is a large investor with hundreds other real estate investment properties. Using the information provided you in tab 7.
Investor A (small) | Investor 2 (large) | |
Expected 1st year NOI | $ 1,800,000 | $ 1,800,000.00 |
Risk free | 1.25% | 1.25% |
Risk Premium | 5.00% | 4.50% |
Expected NOI growth | 2.00% | 2.00% |
Maximum price |
What is the maximum price that each investor should be willing to pay for the property given that both investors would like to meet their total expected return criteria?
Related Book For
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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