Maria M - I believe Jason P. is assuming all of the units are currently vacant. Thus, an assumption of market rental rates and expenses will need to be considered in order to establish an NOI. The application of a Cap Rate (appropriate for the area and building condition) to the NOI would be a good formula to establish a value.
However, it is hard to give a simple blanket formula to come up with a value. Under the scenario above, you would still need to determine an accurate market rent as well as reliable estimates for expenses. Also, importantly, you need to be able to ascertain a Cap Rate for the specific submarket and product you are evaluating. Not everything is apples to apples when making estimates and assumptions.
Jan 6, 2010