Effective RentThis project requires you to compute the effective rent per square foot for a seven$-$year lease of office space. Assume a discount rate of $7$ percent. In your report, describe which rent type should be chosen to maximize the price per square foot and which should be chosen to minimize the price per square foot.A$)$ Gross Lease with Flat RentRent will be $$35\mathrm{.}00$ per rentable square foot each year. The lessor $($owner$)$ will be responsible for the payment of all operating expenses. Expenses are estimated to be $$10\mathrm{.}00$ during the first year and will increase by $$1\mathrm{.}00$ per year thereafter. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$B$)$ Gross Lease with Expense StopRent will be $$33\mathrm{.}00$ per rentable square foot per year with the lessor responsible for payment of recoverable operating expenses as identified in the lease, up to an expense stop of $$10\mathrm{.}00$ per square foot. Lessee pays all expenses in excess of $$10\mathrm{.}00$ per square foot. Expenses are estimated to be $$10\mathrm{.}00$ during the first year and will increase by $$1\mathrm{.}50$ per year thereafter. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$C$)$ Gross Lease with $1$ Year Rent FreeRent during the first year is free. Thereafter, rent will be $$44\mathrm{.}00$ per rentable square foot each year. The lessor $($owner$)$ will be responsible for the payment of all operating expenses. Expenses are estimated to be $$10\mathrm{.}00$ during the first year and will increase by $$1\mathrm{.}00$ per year thereafter. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$D$)$ Gross Lease with $6$ Months Rent Free and StepsRent will be $$30\mathrm{.}00$ per rentable square foot the first year and will increase by $$5$ per year. Rent during the first $6$ months is free. The lessor $($owner$)$ will be responsible for the payment of all operating expenses. Expenses are estimated to be $$12\mathrm{.}00$ during the first year and will increase by $$2\mathrm{.}00$ per year thereafter. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$E$)$ Gross Lease with Step Up RentsRent will be $$15\mathrm{.}00$ per rentable square foot in year $1$ and will increase by $$10\mathrm{.}00$ per square foot each year thereafter. Operating expense will be $$9\mathrm{.}00$ per square foot in year $1$ and will increase by $$0\mathrm{.}50$ per year. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$F$)$ Gross Lease with Step Up Rents and Expense StopRents will be $$25\mathrm{.}00$ per square foot and will increase by $$3$ per year. Operating expenses will be $$10\mathrm{.}00$ and will increase by $$1\mathrm{.}00$ per year. The tenant will pay $($the owner will recover$)$ all increases in operating expense above a $$10\mathrm{.}00$ expense stop. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$G$)$ Gross Lease with Expense Stop and CPI AdjustmentRent will be $$25\mathrm{.}00$ per rentable square foot the first year and will increase by the CPI after the first year with an expense stop at $$10\mathrm{.}00$ per square foot. The CPI is estimated to be $8\%$ each year. Operating expenses are assumed to be $$2$ per square foot in year $1$ and will increase by $$3$ per year thereafter. Apply the Excel NPV and PMT functions to calculate the present value and effective net rent per square foot, respectively. $(12$ Points$)$Note: An expense stop implies that the owner will recover the amount above the expense stop. For example, if an expense stop of $$15$ exists and the operating expense is $$20,$ then the recovery is $$5.$Formula: Net rent $=$ Gross rent Operating expenses $+$ Recoveries A$)$ Gross Lease with Flat Rent

Year $1234567$

Gross Rent

Operating Expenses

Recoveries

Net Rent

Present Value

Effective Net Rent

B$)$ Gross Lease with Expense Stop

Year $1234567$

Gross Rent

Operating Expenses

Recoveries

Net Rent

Present Value

Effective Net Rent

C$)$ Gross Lease with $1$ Year Rent Free

Year $1234567$

Gross Rent

Operating Expenses

Recoveries

Net Rent

Present Value

Effective Net Rent

D$)$ Gross Lease with $6$ Months Rent Free and Steps

Year $1234567$

Gross Rent

Operating Expenses

Recoveries

Net Rent

Present Value

Effective Net Rent

uuE$)$ Gross Lease with Step Up Rent

use Year $1234567$

Gross Rent

Operating Expenses

Recoveries

Net Rent