### Calculate minimum monthly rent

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##### Reference no: EM13106498

Orangemen Lofts plans to add 300 luxury apartments to its complex in Cohoes. The cost of the land now is \$16 million including taxes and fees. The construction cost is expected to be \$64 million including the cost of the central amenities. The annual maintenance and operating cost is expected to be \$450,000. The company also estimates the market value of the property to be 72% of the construction price after 11 years. The average occupancy rate of 88% is expected each year. What is a minimum monthly rent required to make this investment economically acceptable if the company's minimum attractive rate of return is 6% per year, compounded monthly?

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