You have been asked to develop a pro forma (operating statement) for a mixed-use multifamily property with
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Question:
- The property has 10,000 square feet (SF) of ground floor retail space.
- Due diligence reveals that monthly base rent at the subject property averages $975 per apartment unit per month.
- Expense reimbursement is estimated to be $125 per apartment unit per month.
- Space market fundamental information suggests that the retail space can be leased for $10 per square foot per year (PSF/YR) with NNN recoveries.
- Retail market vacancy averages 15%. After reviewing (space market) fundamental information, you discover that apartment vacancy in the submarket is expected to average 7.90% over the next few years.
- Last year the variable operating expenses for the subject property totaled $479,560. Annual real estate taxes are estimated at $2,500 per apartment unit. Inflation over the next year is estimated to be 3%.
Related Book For
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
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