A 1,000 square foot office space is leased for 5 years. The initial rent is...
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A 1,000 square foot office space is leased for 5 years. The initial rent is $23.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gross with an expense stop set at $5.50 per square foot and first year expenses are estimated at $4 per square foot (increasing at $0.50 per square foot per year). The lease term is five years, the discount rate is 9%, and the landlord is going to offer $25,000 in tenant improvements. What is the effective rent associated with the lease?
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