Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently zoned for agricultural use. If purchased, however, Acme must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study, Acme has made estimates for the two uses that it deems possible, that is, office or retail. Based on its estimates, the land could be developed as follows. Which would be the highest and best use of this site? Show your work. 1. Retail 80,000 Office 100,000 $24 40% 3% 13% $100 Rentable Square Feet Rents foot 50% 3% 14% $100 Ratio Growth in NOI Required Return Total Construction Cost per e foot Using the information from Problem #1 above, but assuming the site is currently improved with an industrial building that generates $400,000 of NOI per year. Investors require a return of 10% for such properties and assume no growth in NO. It would require $50,000 to demolish the existing building/prepare the site for redevelopment. From your work in Problem #1 above, what is the highest and best use as vacant? What is the highest and best use as improved?