consider a single tenant net leased property with a new 15-year lease with annual 3% increases. Year 1 NOI is $125,000. You buy the property on day 1 of the lease paying $2,500,000. You estimate that the exit cap will be 50 basis points higher than your going in cap rate. Expected return is 8.0%.

What is the terminal value in Year 7?

Assuming a Year 10 sale, what portion of the IRR is associated with the sale of the property?

Would a competing investment with 50% of the IRR associated with the sale of the property be considered riskier than the property considered?