Given Per Square Foot Total Square Footage A B A B Iding size (Sq. ft.) 80,000...

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Given Per Square Foot Total Square Footage A B A B Iding size (Sq. ft.) 80,000 ht $ 100 $ 120 $ 8,000,000 $ 90,000 10,800,000 intenance (fixed cost) (23) (30) (1,840,000) (2,700,000) Net Operating Income $ 77 $ 90 $ 6,160,000 $ 8,100,000 Change in NOI lling Price Information A B A B les multiple for NOI/sq. ft. pitalization rate (1/Sales multiple) Estimated property value Solution Per Square Foot Total Square Footage ternative Valuation Procedure A B A B sk free rate 5.5% 5.5% 5.5% 5.5% plied value of maintenance costs plied revenue value plied revenue multiple plied revenue cap rate operty value/sq. ft. plied multiple plied cap rate Change in Revenues venues intenance (fixed cost) Net Operating Income Change in Revenues Change in NOI Building A Building B -20% 0% 20% -20% 0% 20% Given Per Square Foot Total Square Footage A B A B Iding size (Sq. ft.) 80,000 ht $ 100 $ 120 $ 8,000,000 $ 90,000 10,800,000 intenance (fixed cost) (23) (30) (1,840,000) (2,700,000) Net Operating Income $ 77 $ 90 $ 6,160,000 $ 8,100,000 Change in NOI lling Price Information A B A B les multiple for NOI/sq. ft. pitalization rate (1/Sales multiple) Estimated property value Solution Per Square Foot Total Square Footage ternative Valuation Procedure A B A B sk free rate 5.5% 5.5% 5.5% 5.5% plied value of maintenance costs plied revenue value plied revenue multiple plied revenue cap rate operty value/sq. ft. plied multiple plied cap rate Change in Revenues venues intenance (fixed cost) Net Operating Income Change in Revenues Change in NOI Building A Building B -20% 0% 20% -20% 0% 20%