$8\mathrm{.}0$ There is wide market consensus that cap rates are expected to rise in the near future. Below are some expectations for cap rates, rental rates, and expenses. Property Type $7$ Going$-$ Going$-$out Annual Annual Location in Cap Cap rate Rental Expense rate Growth Growth Warehouse $8\mathrm{.}08\mathrm{.}02\mathrm{.}02\mathrm{.}0$ Full Service $9\mathrm{.}02\mathrm{.}02\mathrm{.}0$ Office Class B $8\mathrm{.}08\mathrm{.}02\mathrm{.}01\mathrm{.}0$ Using a $5-$year holding period I have calculated the unlevered IRR for each product type assuming $-$ Income $$10,000$ and Expenses $-$$$3,000$ in the first year $($t$-1).$ I assumed that NOI can be found by subtracting expenses from income in each year $($NOI$-$Rent $-$ Expenses$).1.$ Using the results below $-$ why do the hotpl and office building unlevered IRRs differ relative to warehouse unlevered retums. Things to consider$-$ A$-$ Are the difference primarily due to cap rates going up or down? B $-$ Are the difference primarily due to NOI growing faster or slower? C$-$Are the difference primarily due to events $($changes over time$)$ in the space market or capital market? Hotel versus Warehouse A$-$ Difference primarily due to cap rates going up B$-$ NOI for the hotel and warehouse are growing at the same rate, starting at $$7,000$ and ending at $$7\mathrm{.}729$ C$-$ Primary difference for Hotels vs$.$ Warehouses would be in the space quarket because warehouses take much less time to build and have available for use. Office versus Warehouse A$-$ Going in and going out cap rates are both the same for offices and warehouses B$-$ Difference primarily due to NOI growing faster in office buildings C$-$ Differences primarily due to changes in the capital market There is wide market consensus that cap rates are expected to rise in the near future. Below are some expectations for cap rates, rental rates, and expenses. $2\mathrm{.}0$ Property Type $/$ Going. Going$-$out Annual Annual Location in Cap Cap rate Rental Expense rate Growth Growth Warehouse $8\mathrm{.}08\mathrm{.}02\mathrm{.}0$ Full Service $8\mathrm{.}09\mathrm{.}02\mathrm{.}020$ Office Class B $8\mathrm{.}08\mathrm{.}02\mathrm{.}01\mathrm{.}0$ Using a $5-$year holding period I have calculated the unlevered IRR for each product type assuming $-$ Income $$10,000$ and Expenses $-$$$3,000$ in the first year $("$I$).$ I assumed that NOI can be found by subtracting expenses from income in cach year $($NOI$-$Rent $-$ Expenses$)1.$ Using the results below $-$ why do the hotel and office building unlevered IRRs differ relative to warehouse unlevered returns Things to consider A$-$ Are the difference primarily due to cap rates going up or down? B $-$ Are the difference primarily due to NOI growing faster or slower? C$-$Are the difference primarily due to events $($changes over time$)$ in the space market or capital market? Hotel versus Warehouse A Difference primarily due to cap rates going up B$.$ NOI for the hotel and warehouse are growing at the same rate, starting at $$7,000$ and ending at $$7,729$ C$-$ Primary difference for Hotels vs$.$ Warchouses would be in the space gaarket because warehouses take much less time to build and have available for use Office versus Warchouse A$-$ Going in and going out cap rates are both the same for offices and warehouses B$-$ Difference primarily due to NOI growing faster in office buildings C$.$