Question: Question 1 # 5 A potential ofce building development costs $110 per square foot to construct. excluding land costs. The developer now holds an option

Question 1 # 5 A potential ofce building development costs $110 per square foot to construct. excluding land costs. The developer now holds an option to purchase the land for $20.0G0.000: the operating expense ratio is expected to be 40 percent. the stabilized occupancy level for the market is 90 percent. and the market capitalization rate is 8 percent. The building proposed by the developer contains 400,000 square feet of space and gross rents for the building are expected to be $26} per square foot. According to the front door approach to nancial feasibility. should the developer move ahead with the project

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