Question 3- Direct Cap Method-15 Points Question: Use the Direct Cap Method to appraise the following subject property. Property type: Gross Building Area (GBA): 8,500 Net Leasable Area (NLA): 8,000 Tenant Suite 100 Lease: $14.00/sf/yr/Gross Lease, Occupies 4,000 sqft Multi-Tenant Professional Office Tenant Suite 200 Lease: $15.00/sf/yr, Gross Lease, Occupies 4,000 sqgft Subject Vacancy: Market Vacancy: Property Tax Expense: $28,573/Yr Management Expense: 3% of Effective Gross Income Insurance Expense: Maintenance Expense: $0.85/sf of Gross Building Area Reserves for Replacement: $0.25/sf of Gross Building Area Cap Rate: 096-Building is fully occupied 596-Common rate for Offices in area S0.35/sf of Gross Building Area 7.5% 10 Calculate the Following: 1. Potential Gross Income (PGI) 2. Vacancy/Collection Los (V/CL) 3. Effective Gross Income (EGI) 18 19 20 21 4. Operating Expenses (Calculate as $ amount and % of EGI) 5. Net Operating Income (NOI) 6. Value of the Subject 23 24 25 26 27 28 Ready