Appraisal of the fee simple interest in land improved with an office building:
A comparable property was fully leased at the time of sale, the leases were long-term (10 years remaining) net leases, and the credit ratings of the tenants were good.
Market rent for office space is $25/sf.
Contract rent for the comparable property was $24/sf.
The Comp property has 100,000 square feet
Market overall capitalization rate is 10%.
The market vacancy rate is 5%
A reasonable management expense is 4% of effective gross income
Market Evidence supports a discount rate of 15%
If the comparable property loses $91,200 for 10 years, what is the discounted present value of this loss?