You have an office building with a 25,000 sf vacancy. You have two proposals:

Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
icon
Related questions
Question
5
You have an office building with a 25,000 sf vacancy. You have two proposals:
Tenant A
Tenant B
Size
25,000 sf
$45.00 sf NNN
25,000 sf
$40.00/sf NNN
$1.00 psf/yr
10 years
None (rent only)
$25/sf
10/1/2022
Starting Base Rent
Annual increases
3%
Term:
10 years
4 months (rent only)
$100/sf
10/1/2022
Free Rent:
TI Allowance:
Start Date:
Assume there is no parking revenue or moving allowances and that first year opex is $14.00 psf.
Also pls assume commissions are $1/sf/yr for outside broker and $0.50/sf for inside broker.
Using the lease analysis tool, please calculate the NPV for each.
If the owner was considering selling the building in 3 years, please calculate the Capitalized
Lease Value psf; assume a 6% cap rate
If the owner is a long term holder, which lease would they prefer? If they prefer to sell after 3
years, which would they prefer? Why?
Transcribed Image Text:You have an office building with a 25,000 sf vacancy. You have two proposals: Tenant A Tenant B Size 25,000 sf $45.00 sf NNN 25,000 sf $40.00/sf NNN $1.00 psf/yr 10 years None (rent only) $25/sf 10/1/2022 Starting Base Rent Annual increases 3% Term: 10 years 4 months (rent only) $100/sf 10/1/2022 Free Rent: TI Allowance: Start Date: Assume there is no parking revenue or moving allowances and that first year opex is $14.00 psf. Also pls assume commissions are $1/sf/yr for outside broker and $0.50/sf for inside broker. Using the lease analysis tool, please calculate the NPV for each. If the owner was considering selling the building in 3 years, please calculate the Capitalized Lease Value psf; assume a 6% cap rate If the owner is a long term holder, which lease would they prefer? If they prefer to sell after 3 years, which would they prefer? Why?
Expert Solution
steps

Step by step

Solved in 2 steps with 6 images

Blurred answer
Knowledge Booster
Basic Mechanics Problems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, mechanical-engineering and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Elements Of Electromagnetics
Elements Of Electromagnetics
Mechanical Engineering
ISBN:
9780190698614
Author:
Sadiku, Matthew N. O.
Publisher:
Oxford University Press
Mechanics of Materials (10th Edition)
Mechanics of Materials (10th Edition)
Mechanical Engineering
ISBN:
9780134319650
Author:
Russell C. Hibbeler
Publisher:
PEARSON
Thermodynamics: An Engineering Approach
Thermodynamics: An Engineering Approach
Mechanical Engineering
ISBN:
9781259822674
Author:
Yunus A. Cengel Dr., Michael A. Boles
Publisher:
McGraw-Hill Education
Control Systems Engineering
Control Systems Engineering
Mechanical Engineering
ISBN:
9781118170519
Author:
Norman S. Nise
Publisher:
WILEY
Mechanics of Materials (MindTap Course List)
Mechanics of Materials (MindTap Course List)
Mechanical Engineering
ISBN:
9781337093347
Author:
Barry J. Goodno, James M. Gere
Publisher:
Cengage Learning
Engineering Mechanics: Statics
Engineering Mechanics: Statics
Mechanical Engineering
ISBN:
9781118807330
Author:
James L. Meriam, L. G. Kraige, J. N. Bolton
Publisher:
WILEY