Question

A retail lease for 10,000 square feet of rentable space is being negotiated for a five-year...

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?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Common area maintenance (CAM) charges for retail leases in a shopping mall must be calculated. The...
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...
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...
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...
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...
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...
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...
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...
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...
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...
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.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT