Polly Company purchased three buildings. Polly has assembled the following market data, based on commercial real estate sales in the area in the past six months, which can be used to indirectly estimate the selling price of each of the buildings Polly purchased.

For the three buildings it purchased, Polly has measured the size and estimated a capitalization rate based on location and surrounding properties. These estimates for the three buildings are as follows:

Estimate the fair value of each of the threebuildings.

Transcribed Image Text:

Selling Price Square Feet 30,000 Capitalization Rate 10,000 20,000 40,000 50,000 7% 8% 9% 10% $700,000 $1425,000 $2,000,000 $2500,000 3,000,000 .750,000 1,550,000 400.000 625,000 550,000 500,000 1,250,000 1,100,000 1,000,000 2250,000 2,000.000 .800,000 2.625.000 2.300,000 2.100,000 Square Capitalization Feet Rate Building 3 Building 4 Building 5 38,000 41,000 46,000 7% 8% 10%