What is the estimated value of an office building if the market capitalization rate is 9% and the NOI is $110,000?
A)$99,000
B)$119,900
C)$1,119,000
D)$1,222,222
E)$1,323,933

Question

Quizplus · Accepted Answer

NOI (Net Operating Income) = $110,000

Market Capitalization Rate = 9%

Property Value = NOI / Market Capitalization Rate

Property Value = $110,000 / 0.09

Property Value = $1,222,222

Therefore, the estimated value of the office building is $1,222,222 (option D).

What Is the Estimated Value of an Office Building If