You are a landlord and want to figure out the value of a potential lease. The lease is for 15,000 square feet with a term of 5 years at a rate of $18 per square foot per year. All expenses are paid by the tenant. In order to sign this lease you will need to pay $75,000 upfront in tenant improvements and another $50,000 in leasing commissions. What is the value of the lease per SQ FT per year assuming a 6% discount rate?
You are a landlord and want to figure out the value of a potential lease. The lease is for 15,000 square feet with a term of 5 years at a rate of $18 per square foot per year. All expenses are paid by the tenant. In order to sign this lease you will need to pay $75,000 upfront in tenant improvements and another $50,000 in leasing commissions. What is the value of the lease per SQ FT per year assuming a 6% discount rate?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You are a landlord and want to figure out the value of a potential lease. The lease is for 15,000 square feet with a term of 5 years at a rate of $18 per square foot per year. All expenses are paid by the tenant. In order to sign this lease you will need to pay $75,000 upfront in tenant improvements and another $50,000 in leasing commissions. What is the value of the lease per SQ FT per year assuming a 6% discount rate?
Group of answer choices
$14.50
$15.02
$16.13
$16.31
Please answer fast I give you upvote.
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