Question

A retail lease for 10,000 square feet of rentable space is being negotiated for a five-year term (CAM charges are paid by the tenant). The base rent is $25 per square foot for the coming year with step-ups of $1 per year each year thereafter. CAM charges are expected to be $3 /square foot for the coming year and are forecasted to increase by 6 percent at the end of each year thereafter. If the property owner believes that a 12 percent rate of return should be earned annually on this real estate investment, what is the effective rent per rentable area over the five years?

Answer #1

Common area maintenance (CAM) charges for retail leases in a
shopping mall must be calculated. The retail mall consists of a
total area of $2.8 million square feet, of which 800,000 square
feet has been leased to anchor tenants that have agreed to pay $2
per rentable square foot in CAM charges. In-line tenants occupy 1.3
million square feet, and the remainder is common area, which the
landlord believes will require $8 per square foot to maintain and
operate each...

An owner of an office building (“Lessor”) is currently
negotiating a six-year lease with a financial services company
(“Lessee”) for 15,000 rentable square feet of space.
Lessee’s offer: The financial services company would like a base
rent of $21 per square foot per year with step-ups of $2 per square
foot per year beginning the second year. Downtown Covina Office
Building owner would provide full service under the lease
terms.
Building owner’s counter-offer: The owner of the office building
believes...

What is the effective rent for the following lease of 10,000
square feet utilizing the straight-line method?
Rent: $45 PSF/ year
Lease Term: 5 Years
Free Rent: 3 Months, one at the each of lease
year until burned off
Tenant Improvements (TIs): $25.00 per square
foot above what they market normally provides
Moving Cost Credit: $5,000 off First Months
Rent
[Enter Answer in the following format $XX.XX with appropriate
rounding]
Show work Please

A property has one tenant that has a ten year lease for 10,000
square feet. The rent in year 1-3 is $10 per square ft. gross. In
year 4-7 the rent is $15. In year 8-10 the rent is $20. Under GAAP,
what is the annual straight line rent?

You recently took over an indoor mall and you are concerned
about leasing arrangements for retail space within the mall. The
common area maintenance charges are estimated to be $8.00 per
square foot per year. In-line tenants of the mall occupy 1.3
million square feet. The three anchor tenants occupy 800,000 square
feet of space, and all of them have agreed to pay $2.00 per
rentable square foot for the common area maintenance. The mall
consists of a total of...

1a. A building owner is evaluating the following
alternatives for leasing space in an office building for the next
five years (using a 5% discount rate):
Net lease with steps. Rent will be $10/ square foot
the first year and will increase by $1.50 per square foot each year
until the end of the lease.
Net lease with CPI adjustments. The rent will be $12
/square foot in the first year. After the first year, the rent will
be increased...

A building owner is evaluating the following alternatives for
leasing space in an office building for the next five years (using
a 5% discount rate):
I.Net lease with steps. Rent will be $10/ square foot the first
year and will increase by $1.50 per square foot each year until the
end of the lease.
II. Net lease with CPI adjustments. The rent will be $12 /square
foot the first year. After the first year, the rent will be
increased by...

A building owner is evaluating the following option for leasing
space in an office building for the next five years (using a 5%
discount rate): Gross lease with expense stop and CPI adjustment.
Rent will be $20 the first year and increase by the full amount of
any change in the CPI after the first year with an expense stop at
$10/square foot. The CPI is expected to increase 4% per year.
Expenses are estimated to be $10 /square foot...

You are evaluating two alternative five-year lease
opportunities for 8,000 sf2 office space. The first
alternative has first-year rent of $18 per sf2, and this
will rise by $1.00 in each year thereafter. You will pay no expenses other than rent.
The second alternative has first-year rent of $15 per
sf2, which will increase by 3% per year in each year
thereafter. The second alternative also requires you to pay a comman area charge of $2 per
sf2 in year...

Given the following information, calculate the effective monthly
rent payment: lease term: 10 years; concession: first year free
rent to be spread over the term of the lease; rental space: 5000
square feet; rental rate: $28.59 per square foot per year;
landlord's discount rate: 10%; rents payments received at the
beginning of each month.

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