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What adjustment should be made to the comparable sales

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    Assignment ID: FG133134430

    Question – The subject property, an industrial building, has a 25-foot eave height. In the local market, the typical eave height is 18 feet. The excess cost to build the 25-foot eave height building is estimated at $175,000. No additional rent can be obtained for the additional eave height. However, the added annual cost of ownership (Le., taxes and insurance) associated with this type of building is $15,000. Physical deterioration has been estimated to be 15% of the current construction cost. An appropriate building capitalization rate is 12%. What adjustment should be made to the comparable sales for the subject property’s additional eave height?

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