Rent is $39/sq ft and increases by $2/sq ft each year thereafter. Operating expenses are $20/sq ft, increasing by $1/year.Question:Rent is $39/sq ft and increases by CPI index 3% each year thereafter. Operating expenses are $20/sq ft, increasing by $1/year. What is the effective rent? YearGross Lease -Step Up RentsGross rentLess: OperatingExpensesAdd: RecoveriesNet rentAverage net rentPresent valueEffective net rentO21.0078.8920.81139.0020.0019.00241.0021.0020.00343.0022.0021.00445.0023.0022.00547.0024.0023.00

The rent is $39/sq ftThe rent increased by $2/sq ftThe CPI index is 3% for each year. The operating…

Answered: Rent is $39/sq ft and increases by…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Rent is $39/sq ft and increases by $2/sq ft each year thereafter. Operating expenses are $20/sq ft, increasing by $1/year.

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Rent is $39/sq ft and increases by CPI index 3% each year thereafter. Operating expenses are $20/sq ft, increasing by $1/year. What is the effective rent?

Year
Gross Lease -
Step Up Rents
Gross rent
Less: Operating
Expenses
Add: Recoveries
Net rent
Average net rent
Present value
Effective net rent
O
21.00
78.89
20.81
1
39.00
20.00
19.00
2
41.00
21.00
20.00
3
43.00
22.00
21.00
4
45.00
23.00
22.00
5
47.00
24.00
23.00

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