An office building with 15 tenants sold for $5 million. Estimated annual income is $400,000. What is the GIM?

The Gross Income Multiplier (GIM) is a valuation tool that helps estimate the value of an income-producing property based on its gross income. To calculate the GIM, you divide the sale price of the property by its annual gross income.

In this scenario, the office building was sold for $5 million, and it generates an estimated annual income of $400,000. Thus, the GIM calculation would be:

GIM = Sale Price / Annual Income

GIM = $5,000,000 / $400,000

GIM = 12.5

This shows that for every dollar of annual income, the property is valued at 12.5 times that amount, hence indicating a GIM of 12.5 times. Therefore, the chosen answer reflects the correct calculation and understanding of the GIM concept in real estate valuation. Understanding the significance of this figure can help buyers and real estate professionals assess property investments effectively.