. Real Estate Development A real estate developer is planning to build an apartment building specifically for graduate students on a parcel of land adjacent to a major university. Four types of apartments can be included in the building: efficiencies, and one-, two-, or three-bedroom units. Each efficiency requires 500 square feet; each one-bedroom apartment requires 700 square feet; each two-bedroom apartment requires 800 square feet; and each threebedroom unit requires 1,000 square feet. The developer believes that the building should include no more than 30 one-bedroom units, 44 two-bedroom units, and 20 three-bedroom units. Local zoning ordinances do not allow the developer to build more than 100 units in this particular building location and restrict the building to a maximum of 80,000 square feet. The developer has already agreed to lease 10 one-bedroom units and 16 two-bedroom units to a local rental agency that is a “silent partner” in this endeavor. Market studies indicate that efficiencies can be rented for $900 per month, one-bedrooms for $1100 per month, two-bedrooms for $1320 per month, and three-bedrooms for $1700 per month. 1. How many rental units of each type should the developer include in the building plans in order to maximize the potential rent income from the building? 2. A small number of efficiency units are included in the solution that maximizes the potential rent. However, the developer knows such a plan would not be feasible. The building should include either zero efficiency unit, or at least ten efficiency units. With this additional constraint, how many rental units of each type should the developer include in the building plans?
. Real Estate Development A real estate developer is planning to build an apartment building specifically for graduate students on a parcel of land adjacent to a major university. Four types of apartments can be included in the building: efficiencies, and one-, two-, or three-bedroom units. Each efficiency requires 500 square feet; each one-bedroom apartment requires 700 square feet; each two-bedroom apartment requires 800 square feet; and each threebedroom unit requires 1,000 square feet. The developer believes that the building should include no more than 30 one-bedroom units, 44 two-bedroom units, and 20 three-bedroom units. Local zoning ordinances do not allow the developer to build more than 100 units in this particular building location and restrict the building to a maximum of 80,000 square feet. The developer has already agreed to lease 10 one-bedroom units and 16 two-bedroom units to a local rental agency that is a “silent partner” in this endeavor. Market studies indicate that efficiencies can be rented for $900 per month, one-bedrooms for $1100 per month, two-bedrooms for $1320 per month, and three-bedrooms for $1700 per month. 1. How many rental units of each type should the developer include in the building plans in order to maximize the potential rent income from the building? 2. A small number of efficiency units are included in the solution that maximizes the potential rent. However, the developer knows such a plan would not be feasible. The building should include either zero efficiency unit, or at least ten efficiency units. With this additional constraint, how many rental units of each type should the developer include in the building plans?
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