Income based appraisal

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Income Based Appraisal

An investor has found a property that is currently fully occupied. This property is a mixed-use building that has four retail tenants on the first floor. The main tenant is a 20,000 sqft C-Store with deli attached. This tenant pays $18 per sqft per year. The other three tenants are boutique shops each 5,000 sqft and paying $20 per sqft per year. The four floors above the first floor are dedicated to residential apartments. Each floor has 28 apartments that are 2 bedroom with 1 bathroom. Each tenant pays $1000 per month in rent. Other income is 4% of rent and there are concessions on rent averaging about 2% of rent. You know that the property is currently fully occupied, but that the broader market has a 5% vacancy rate for apartments and 10% for retail space. Operating expenses for the full property are 38% of effective gross income. Please provide the best estimate of the value of the property that is currently vacant.

Reference no: EM131872488

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