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

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

Elements Of Electromagnetics
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
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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?
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