roblem 17-18 Real Estate Valuation (LO4, CFA3) enterland Partners has collected information on the recent purchases of three small shopping centers. Centerland is considering the rchase of a similar property with an NOI of $4.4 million. Shopping Center Castleton Round Fashion Commons Belden Square NOI $ 3.4 million Valuation $11.20 million $ 39.22 million $ 5.0 million $ 3.6 million $ 31.46 million
roblem 17-18 Real Estate Valuation (LO4, CFA3) enterland Partners has collected information on the recent purchases of three small shopping centers. Centerland is considering the rchase of a similar property with an NOI of $4.4 million. Shopping Center Castleton Round Fashion Commons Belden Square NOI $ 3.4 million Valuation $11.20 million $ 39.22 million $ 5.0 million $ 3.6 million $ 31.46 million
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 2RP
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Question
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![Problem 17-18 Real Estate Valuation (LO4, CFA3)
Centerland Partners has collected information on the recent purchases of three small shopping centers. Centerland is considering the
purchase of a similar property with an NOI of $4.4 million.
Shopping Center
Castleton Round
Fashion Commons
Belden Square
Valuation
NOI
$ 3.4 million
$ 11.20 million
$ 5.0 million
$ 39.22 million
$ 3.6 million
$ 31.46 million
a. What is the market capitalization rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.
Market capitalization rate
%
b. What valuation should Centerland assign to the target property?
Note: Do not round intermediate calculations. Enter your answer in millions. Round your answer to 2 decimal places.
Value estimate
million](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8fb671d5-9b0c-415f-9634-86de1931e7eb%2Fb62fd9a0-a580-4a23-90c3-3ce66ae5764e%2Fqexey1k_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 17-18 Real Estate Valuation (LO4, CFA3)
Centerland Partners has collected information on the recent purchases of three small shopping centers. Centerland is considering the
purchase of a similar property with an NOI of $4.4 million.
Shopping Center
Castleton Round
Fashion Commons
Belden Square
Valuation
NOI
$ 3.4 million
$ 11.20 million
$ 5.0 million
$ 39.22 million
$ 3.6 million
$ 31.46 million
a. What is the market capitalization rate?
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.
Market capitalization rate
%
b. What valuation should Centerland assign to the target property?
Note: Do not round intermediate calculations. Enter your answer in millions. Round your answer to 2 decimal places.
Value estimate
million
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