Real Estate Math
An Iowa commercial building has 8,000 rentable square feet leased at $14/sq ft/year. The expense ratio is 40%. At a 7.5% cap rate, what is the value?
A$896,000✓ Correct
B$672,000
C$1,120,000
D$560,000
Explanation
Annual gross income = 8,000 x $14 = $112,000. NOI = $112,000 x (1 - 0.
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