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What is the net operating income

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Reference no: EM132421980

X Limited owns and manages an office building with the following information:

Usable area (sq. ft)=300,000

Current rent per square foot per month = $48

Average vacancy rate on usable area=11%

Number of car parks=110

Average monthly car park income per car park = $4,100

Property taxes: Government rent and rates=6%

Management, security and maintenance cost=25%

Profit tax rate=15%

Constant growth rate of rental and car park income=3.0%

Current property value=$1,700,000,000.00

a) What is the net operating income (NOI) of the office building?

b) What is the capitalization rate for the office building?

c) What is the required rate of return for the office building?

 

Reference no: EM132421980

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