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A property with a trailing cap rate of 5.7% was purchased for $28,480,000 in Yea...
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A property with a trailing cap rate of 5.7% was purchased for $28,480,000 in Year 0, and the rent is expected to grow by 1% per year. The purchase was financed using an interest-only debt of 70% at an interest rate of 5.85% per annum. Capital improvements are $238,000 and structural reserves are $115,000 in Year 2. What is the income return on equity (ROE) for this property at the end of Year 2? Ignore any tax.
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