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A property owner is evaluating the following alternatives for leasing space in his office building...

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Finance

A property owner is evaluating the following alternatives for leasing space in his office building for the next five years:

Gross lease with expense stop and CPI adjustment. Rent will be $26 the first year and increase by the full amount of any change in the CPI after the first year with an expense stop at $9 per square foot. The CPI and operating expenses are followed: The CPI is expected to increase 7 percent per year. Expenses are estimated to be $9 during the first year and increase by $1 per year thereafter. Calculate the effective rent to the owner (after expenses) for the lease using a 10 percent discount rate.

Answers:

25.65

26.68

22.57

20.52

Answer & Explanation Solved by verified expert
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