AG HBU Part 12. Level B Marketability Analysis for Office Property: Steps 4–6 Flashcards
The supply of office space in a community is 150,000 square feet, and the current occupancy rate is 85%. One new building of 25,000 square feet is to
be constructed within the next five years. Current employment in the community is 6,250, of which 12% is office employment. If the number of office-using jobs increases by 100 over the next five years and the square feet of occupied space per employee does not change, what will the occupancy rate be in five years?
A. 82.6%
B. 85.0%
C. 87.4%
D. 96.3%
A. 82.6%
Current office employment: 6,250 × 0.12 = 750
Current occupied office: 150,000 × 0.85 = 127,500
Current office demand per office employee: 127,500 ÷ 750 = 170
Office employment in 5 years: 750 + 100 = 850
Office demand in 5 years: 850 × 170 = 144,500 sq. ft.
Office supply in 5 years: 150,000 + 25,000 = 175,000 sq. ft.
Occupancy rate in 5 years: 144,500 sq. ft. demand ÷ 175,000 sq. ft. supply = 0.826
Course handbook guidance: Part 12, item II.B
Based on the information for an office market in the following table, what is residual demand for office space in Year 5? (Assume that the average square feet occupied per office worker remains the same.)
A. −12,222
B. −6,667
C. 6,667
D. 12,222
Current office demand: 300,000 × 0.92 = 276,000
Current office demand per office employee: 276,000 ÷ 1,380 = 200
Office demand in 5 years: 1,540 × 200 = 308,000
Supportable (adjusted) demand in 5 years: 308,000 ÷ 0.90 (equilibrium occupancy) = 342,222
Residual demand: 342,222 − 330,000
(office supply in 5 years) = 12,222
Course handbook guidance: Part 12, item II.B
There are currently 750,000 square feet of office space in the subject’s node. The average occupancy rate is 90%. The subject is 90,000 square feet and is 5% vacant. What is the subject’s current capture rate within its node?
A. 11.4%
B. 12.0%
C. 12.7%
D. 13.0%
C. 12.7%
(90,000×0.95)÷(750,000×0.90)
Course handbook guidance: Part 12, item III.B
