Question: An analyst is analyzing a comparable property that produces an annual Net operating income of $1,000,000 per year. Overall capitalization rates in the market are

An analyst is analyzing a comparable property that produces an annual Net operating income of $1,000,000 per year. Overall capitalization rates in the market are 5.0%. The land associated with the property was sold for $6,000,000 and leased back at $100,000 per year. What is the implied building capitalization rate?

[Enter answer in following format X.XX%]

[Hint: Building Residual or Band of Investment on the Symbols and Formulas Sheet]

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