You are reviewing the possible purchase of an office building in New York City and you expect to close before the end of February. The building is fully occupied with a single net lease tenant who signed a ten year lease in 2007.
(A) What approaches to value would you use to come up with the price to be paid? What information would you review and consider in doing your evaluation? What concerns would you have about reviewing the income/expense statement of the property and any appraisal on the property?
(B) You decide that the property is worth $1 million, and the seller agrees to sell it to you for $1 million. An appraisal on the property also concludes that the property is worth $1 million. The NYC property tax assessment on the building is $1 million. What are the issues you should be considering with respect to the tax assessment as you proceed to a closing and after you acquire the property?