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 $600 per month per unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes have 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 $550 per month. Palms, a 90-unit complex, is presently renting units at $650 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? (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Comparable The Oaks Palms Estimated Value
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 $600 per month per unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes have 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 $550 per month. Palms, a 90-unit complex, is presently renting units at $650 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? (Do not round intermediate calculations. Round your final answers to the nearest dollar amount.) Comparable The Oaks Palms Estimated Value
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Ee.74.
Transcribed Image Text: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 $600 per month per unit could be realized in the appropriate market area. During
the last six months, two very comparable apartment complexes have 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 $550 per month. Palms, a 90-unit complex, is presently
renting units at $650 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? (Do not round intermediate calculations.
Round your final answers to the nearest dollar amount.)
Comparable
The Oaks
Palms
Estimated Value
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