Real Estate Math

A Pittsburgh, PA, office building has 50,000 sq ft of leasable space at $18/sq ft/year. The vacancy rate is 10% and operating expenses are $350,000/year. What is the NOI?

A$550,000
B$900,000
C$810,000
D$460,000✓ Correct

Explanation

Potential Gross Income (PGI) = 50,000 × $18 = $900,000. Vacancy loss = $900,000 × 10% = $90,000.

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