question archive A property produces a first year NOI of $100,000 which is expected to grow by 2% per year
A property produces a first year NOI of $100,000 which is expected to grow by 2% per year
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A property produces a first year NOI of $100,000 which is expected to grow by 2% per year. If the property is expected to be sold in year 10, what is the expected sale price based on a terminal capitalization rate of 9.5% applied to the 11th year NOI?
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NOI at the end of 10th year = 100000 × 1.02 ^10 = 121899.442
Expected Sale Price based on terminal Capitalization Rate = 121899.442 / 9.5% = $ 1283152
