Capitalizes actual and stabilized NOI at submarket cap rates, after stripping non-allowable expenses and applying market vacancy.
| Reported expenses (ex. tax) | $3,964,800 |
| less mortgage interest, depreciation | -$1,827,000 |
| less commissions, roof (capital) | -$243,150 |
| Allowable operating expenses | $1,894,650 |
V = NOI / (R₀ + ETR)