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What is the indicated value of the subject property using direct capitalization, rounded to the nearest dollar?

What is the indicated value of the subject property using direct capitalization, rounded to the nearest dollar?

Essentials Of Investments
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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You have been asked to estimate the market value of an apartment complex that is producing $1,115,000 in annual net operating income. Four highly similar and competitive apartment properties within two blocks of the subject property have sold within that past three months. All four offer essentially the same amenities and services as the subject. All were open-market transactions with similar terms of sale. In short, all are equally valid substitutes for the subject property. The sale prices and estimated fırst year net operating incomes for the four properties were as follows: Comparable 1: Sales price $22,000,000; NOI $1,100,000 Comparable 2: Sales price $25,100,402; NOI $1,250,000 Comparable 3: Sales price $21,089,109; NOI $1,065,000 Comparable 4: Sales price $22,000,000; NOI $1,089,000 What is the indicated value of the subject property using direct capitalization, rounded to the nearest dollar?
Transcribed Image Text:You have been asked to estimate the market value of an apartment complex that is producing $1,115,000 in annual net operating income. Four highly similar and competitive apartment properties within two blocks of the subject property have sold within that past three months. All four offer essentially the same amenities and services as the subject. All were open-market transactions with similar terms of sale. In short, all are equally valid substitutes for the subject property. The sale prices and estimated fırst year net operating incomes for the four properties were as follows: Comparable 1: Sales price $22,000,000; NOI $1,100,000 Comparable 2: Sales price $25,100,402; NOI $1,250,000 Comparable 3: Sales price $21,089,109; NOI $1,065,000 Comparable 4: Sales price $22,000,000; NOI $1,089,000 What is the indicated value of the subject property using direct capitalization, rounded to the nearest dollar?
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