Vertex Properties is assessing the acquisition of an undeveloped land parcel currently zoned for agriculture. Once acquired, the firm will explore commercial rezoning options, focusing on retail or office development. The market analysis outlines potential development scenarios as follows:
retail rent is 24; retail operating expense ratio is 50; retail avg. growth in NOI per annum is 3.90%; retail return is 10%; retail total construction Cost per square is 79; office Rent per square foot is 28; office Operating expense ratio is 50; office Avg. growth in NOI per annum is 2.60%; office Required return (r) is 14%; office Total construction cost per square foot is 110

Calculate the difference between the valuation of the retail project and the office project: PV of retail - PV of offices