What is the market value of the property at a discount rate of 8%?

Property Assumptions

First-year PGI of an office building is $70,000 and increases by 2% annually.
The vacancy and collection is 5% of PGI
The operating expense is 40% of EGI.
Let us assume that the holding period for comparable properties is three years.
Use a cap rate of 10% to find the SP at the end of year 3 (using one of the techniques you learned to calculate Reversion). Assume selling expenses to be 5% of the S.P.

Answer rating: 100% (QA)

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