Hey all, I know that return on cost or yield on cost is calculated based on NOI/ total cost. Out of curiosity, does anyone factor in general vacancy into the NOI number?
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yes
Yes, a trended RoC figure, most typically, should include some general vacancy assumption else you'll be overstating yield. A scenario where you potentially wouldn't are if you're developing a BTS, single-tenant office/industrial/retail asset with 10+ years of WALT.
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