Real Estate Math
A Texas commercial building has 10,000 square feet of rentable space. Market rent is $18 per square foot per year. The building is 90% occupied. Annual operating expenses are $60,000. What is the NOI?
A$102,000✓ Correct
B$120,000
C$108,000
D$95,000
Explanation
Potential Gross Income = 10,000 sq ft × $18 = $180,000. Effective Gross Income = $180,000 × 90% = $162,000. NOI = $162,000 – $60,000 = $102,000.
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