Space and gross rents for the building

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A potential of?ce building development costs $110 per square foot to construct. excluding land costs. The developer now holds an option to purchase the land for $20.0G0.000: the operating expense ratio is expected to be 40 percent. the stabilized occupancy level for the market is 90 percent. and the market capitalization rate is 8 percent. The building proposed by the developer contains 400,000 square feet of space and gross rents for the building are expected to be $26} per square foot. According to the front door approach to ?nancial feasibility. should the developer move ahead with the project?

Reference no: EM133111061

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