Question: Total development costs (including sufficient profit for the developers) are $200/SF. Cap rates in the asset market are 10%. What is the replacement cost rent

  1. Total development costs (including sufficient profit for the developers) are $200/SF. Cap rates in the asset market are 10%. What is the replacement cost rent in this market (another way of saying, what is the market rent at which it is financial feasible for development to take place)?

    a.

    $10.00 per SF

    b.

    $12.50 per SF
    c.

    $16.00 per SF
    d.

    $18.00 per SF
    e.

    $20.00 per SF

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