A 1500 square foot office building will be leased at $12.00 per square foot and about 97.5% of the building is expected to be occupied. There is a lobby at the entrance of the building which contains vending machines that will earn $900 over the entire year. Operating expenses are projected at $6.25 per square foot and an expense stop will be set at $5.75 per square foot. Some credit losses are anticipated to be about 1.5% of potential rent. In addition, some tenants will be granted one month of free rent and the total cost will be equal to about 5.0% of potential rent. Finally, the landlord plans to set aside $0.75 per square foot in a CAPEX fund. What will be net operating income (NOI)? Round your answer to the nearest dollar. Your Answer: Answer
A 1500 square foot office building will be leased at $12.00 per square foot and about 97.5% of the building is expected to be occupied. There is a lobby at the entrance of the building which contains vending machines that will earn $900 over the entire year. Operating expenses are projected at $6.25 per square foot and an expense stop will be set at $5.75 per square foot. Some credit losses are anticipated to be about 1.5% of potential rent. In addition, some tenants will be granted one month of free rent and the total cost will be equal to about 5.0% of potential rent. Finally, the landlord plans to set aside $0.75 per square foot in a CAPEX fund. What will be net operating income (NOI)? Round your answer to the nearest dollar. Your Answer: Answer
Chapter9: Capital Budgeting And Cash Flow Analysis
Section: Chapter Questions
Problem 12P
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