a. Based on the data provided here, how would an appraiser establish an estimate of value of the oaks and palms property? (Round intermediate calculations and final answers to the nearest dollar amount.)
ABC Residential Investors, LLP, is considering the purchase of a 120-unit apartment complex in Steel City, Pennsylvania. A market study of the area reveals that an average rental of $640 per month per unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes have been sold in the same market area. The Oaks, a 140-unit project, sold for $9 million. Its rental schedule indicates that the average rent per unit is $630 per month. Palms, a 90-unit complex, is presently renting units at $730 per month, and its selling price was $6.6 million. The mix of number of bedrooms and sizes of units for both complexes is very similar to that of the subject property, and both appear to have normal vacancy rates of about 10 percent annually. All rents are net as tenants pay all utilities and expenses.
Required:
a. Based on the data provided here, how would an appraiser establish an estimate of value of the oaks and palms property? (Round intermediate calculations and final answers to the nearest dollar amount.)
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