What is the expected irr for retail reit

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Reference no: EM133253172

RETAIL REIT wants to buy CORE SHOPPING CENTER from its current owner and uses the cash flow projections to value the property.  RETAIL REIT will pay $30,500,000 for the center and expects to sell it at the end of Year 10 for $36,000,000 with a 2% cost of sale.  NOI growth is expected to be just over 2.0% (annualized) through the 10 years.  

  1. What is the expected IRR for RETAIL REIT?
  2. If NOI growth is 1.9% through the analysis period, the impact to RETAIL REIT's IRR will be?
  3. If capitalization rates compress and RETAIL REIT sells the property for $37,000,000, the impact to RETAIL REIT's IRR will be?
  4. If the Tenant Improvement expense in Year 2 is $120,000, the impact to RETAIL REIT's IRR will be?

Reference no: EM133253172

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