You own a property which is in an excellent location. Several developers have approached you to purchase
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Question:
You own a property which is in an excellent location. Several developers have approached you to purchase it. Unfortunately, you can't afford to develop it. Given the information below, what is the land value for each project? Which project will yield the "highest and best use land value"? How much should you be able to sell the land for? What are the risks to this analysis?
| Project | NOI | Exp. Return | Growth | Building Cost per SQFT | Building Sqft |
| Office: | 1,950,000 | 11.60% | 3.25% | 250 | 50,000 |
| Retail: | 1,435,000 | 10.30% | 2.50% | 280 | 30,000 |
| Apartment: | 1,350,000 | 12.00% | 3.50% | 225 | 22,000 |
| Warehouse: | 1,275,000 | 9.80% | 2.00% | 175 | 32,000 |
Expert Answer:
The land value for each project would be as follows Office 21250000 Retail 1650... View the full answer
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