NVI Technical College Information

I NCOME C APITALIZATION A PPROACH 63

COMMENTS Real Estate Taxes

Taxes were previously concluded in the tax section of this report and considered to be reasonable based upon the subject’s assessment compared to similar properties. On a per square foot basis, the subject’s tax liability of $0.90 per square foot appears to be bracketed by those amounts reported via IREM. This category includes property and casualty insurance that is required or typical at the subject and similar properties. Insurance expenses have been estimated to approximate the median amount reported via IREM at $0.20 per square foot. Industrial properties often have a CAM charge in order to provide for routine maintenance of the landscaping, parking lot repair, cleaning, and other items associated with maintaining the subject improvements. Appropriate CAM charges of $1.50 per square foot are estimated and regarded as relatively consistent with the median amount indicated in IREM. This category accounts for off-site management performed by the owner or third-party management company, typically ranging from 2% to 5%. We have estimated this expense as 3.0% of EGI, which appears reasonable given the data presented. This account accrues funds for the eventual repair/replacement of building components outside of CAM. Based upon our experience with similar properties and the age of the subject, and its condition, we have estimated this expense at $0.25 per square foot.

Insurance

CAM

Management

Replacement Reserves

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