B 3.3  Favorable Market Conditions

This type of sample project is feasible only in communities that are large enough to support a private commercial office market. Smaller localities are unlikely to have real estate developers capable of, or interested in, constructing an office building of any kind. The LGU should have evidence of a robust demand for the facility and consumer willingness to pay a premium for higher quality accommodation and services.

Some of the hypothetical market pre-conditions which have been used to analyze the financial feasibility of this sample project are:

1.  Full capacity utilization of the leasable floor area

2.  Annual rental increase of 5 percent on the average

3.  Sufficient demand for the specialized functions module