NVI Technical College Information

I NCOME C APITALIZATION A PPROACH 67

C APITALIZATION R ATE S UMMARY AND C ONCLUSIONS The capitalization rates derived from the various techniques are summarized in the following table.

SUMMARY CAPITALIZATION RATE AND CONCLUSION

Method

Capitalization Rate

Market Extraction Investor Surveys Market Participants Band of Investment Primary Weight Secondary Weight

6.15% - 8.50%

7.88%

5.50% - 7.00%

8.86%

Market Extraction

Investor Surveys, Market Participants

Capitalization Rate Conclusion

8.50%

Typically, most weight is placed on the rates derived from sources most closely associated with the subject’s immediate market, that is, comparable sales, particularly if the comparable sales have a similar risk profile to the subject property. Based on all available data sources, we conclude to a 8.50% capitalization rate. V ALUE I NDICATION FROM D IRECT C APITALIZATION A value indication by the Direct Capitalization Method is calculated by dividing the net operating income (NOI), derived earlier in this section by the appropriate capitalization rate. Our conclusion via the Direct Capitalization Method is as follows.

DIRECT CAPITALIZATION METHOD VALUE CONCLUSION - AS IS

NET OPERATING INCOME

$1,848,609

$6.55

Sensitivity Analysis (0.25% OAR Spread)

Value

$/SF

Based on Low-Range of 8.25%

$22,407,383 $21,748,342 $21,126,961 $21,748,342 $21,750,000

$79.42 $77.09 $74.89 $77.09 $77.09

Based on Most Probable Rate of 8.50%

Based on High-Range of 8.75%

Reconciled Value

Rounded to nearest $10,000

F OUR B UILDING I NDUSTRIAL C OMPLEX A PPRAISAL

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