Three Highly Similar and Competitive Income-Producing Properties Within Two Blocks

question 29

Multiple Choice

Three highly similar and competitive income-producing properties within two blocks of the subject property have sold this month. All three offer essentially the same amenities and services as the subject property. The sale prices and estimated first-year NOI for each of the comparable properties are as follows: $$\begin{array} { | c | c | c | } \hline \text { Cormarable } & \text { Srice } & \mathrm { NOI } _ { 1 } \\\hline \mathrm { A } & \$ 500,000 & \$ 55,000 \\\hline \mathrm { B } & \$ 420,000 & \$ 50,400 \\\hline \mathrm { C } & \$ 475,000 & \$ 53,400 \\\hline\end{array}$$
Using the information provided, calculate the overall capitalization rate by direct market extraction assuming each property is equally comparable to the subject.

• A) 11.0%
• B) 11.2%
• C) 11.4%
• D) 12.0%

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Definitions:

C-N Bond

A chemical bond between carbon and nitrogen atoms, common in organic compounds such as amines and amides.

IR Stretch

Infrared stretching refers to the vibration that occurs between atoms within molecules as they absorb infrared radiation, indicative of functional groups in a compound.

IR Bond Stretches

Refers to changes in bond lengths within molecules as observed in infrared spectroscopy, indicative of various functional groups.

Wavenumber

A measure of the frequency of a vibration or a wave, often used in spectroscopy, expressed as the number of waves per unit distance.