You have just completed the appraisal of an office building
You have just completed the appraisal of an office building and have concluded that the market value of the property is $2,500,000. You expect Potential Gross Income (PGI) in the first year of operations to be $450,000; vacancy and collection losses to be 9 percent of PGI; operating expenses to be 38 percent of Effective Gross Income (EGI), and capital expenditures to be 4 percent of EGI.1. What is the implied going-in capitalization rate?2. What is the effective gross income multiplier (EGIM)?
