Question: You are developing an office building in Miami with a stabilized NOI of $2.5 million and a sales value at a 5% cap rate. Similar

You are developing an office building in Miami with a stabilized NOI of $2.5 million and a sales value at a 5% cap rate. Similar properties are selling at cap rates of 6.5% to 7.5%. What is the return on cost that you will need to achieve for a developers profit of $5 million?

A. 5.0% B. 7.5% C. 5.7% D. 5.5%

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