NVI Technical College Information

I NCOME C APITALIZATION A PPROACH 61

M ARKET R ENT C ONCLUSION Given the condition of the subject, the market rent would be towards the upper end of the range indicated by the comparables. However, considering the outlying location and large size of the subject, a rate towards the lower middle portion of the range is appropriate. Of note, the subject is one of the newer facilities when compared to the comparables, thus a rental rate above the average is reasonable. Based upon the preceding data, a summary of the concluded market rent utilized within the following analysis is presented within the following table.

MARKET RENT CONCLUSION

Net Rentable Area (SF)

282,125

Comparable Lease Rate Range Concluded Market Rent ($/SF)

$5.50 - $16.00

$8.00 NNN None None

Expense Structure

Concessions

Annual Escalations

Tenant Improvements ($/SF) New

$1.00 $0.50

Renewal

Leasing Commissions New

6% 3%

Renewal

5 years

Average Lease Term (years)

P OTENTIAL G ROSS R ENTAL I NCOME C ONCLUSION Potential gross rental income based on contract rents, with market rents applied to vacant and/or owner-occupied space, and potential gross rental income based on market rents is shown in the following table.

POTENTIAL GROSS RENTAL INCOME

Total

Market Rent

Tenant

Area (SF)

$/SF Annl. Rent $8.00 $2,257,000

Total

282,125

V ACANCY AND C OLLECTION L OSS Occupancy data for the market, submarket, lease comparables and the subject, as well as the concluded occupancy/vacancy for the subject, is shown in the following table.

VACANCY CONCLUSION

85%–100%

Lease Comparables Occupancy Range Lease Comparable Average Occupancy

96%

Subject's Current Occupancy Subject's Proposed Occupancy Subject's Stabilized Occupancy Subject's Stabilized Vacancy Loss

100%

90%

90.0% 10.0%

F OUR B UILDING I NDUSTRIAL C OMPLEX A PPRAISAL

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