A$)$ Calculating Cap Rates Based on $3$ Recent Similar Sales

Assume you have an appraisal assignment to generate and capitalization rate for use in a recently built Office Building in Midtown Omaha. Fortunately, there are two other similar buildings that are nearby, similar and also recently built that have known sales prices. Property $1$ sold for $2$ million and has gross annual rental income of $$260,000$ per year, vacancy losses of $10\%$ and expenses of $5\%.$ Property $2$ sold for $$1\mathrm{.}8$ million has gross rental income of $$190,000,$ vacancy losses of $5\%$ and expenses of $8\%.$ Property $3$ sold for $$2\mathrm{.}6$ million, with gross rental income of $$140,000$ vacancy losses of $4\%$ and expenses of $4\%$

Use this data to calculate a cap rate for each property. Do this by creating an excel spreadsheet with calculations PGI, EGI, NOI an cap rate$).$ Then report an average cap rate averaged across all $3$ properties to $1$ decimal point $($e$.$g$.$ X$.$X$\%)$

Report your answers in this table:

Sale # Price PGI EGI NOI

Cap Rate

Avg Cap rate

$3$ sales