Redstone Construction Company

The CEO of Redstone Construction Co., Blake James, has just come from a meeting with his construction and marketing staff, where he was given the latest client request for a retail store.

Company Background

Redstone Construction Company has led the real estate construction and development industry for several decades. The company has completed numerous residential and commercial projects as a general contractor, earning a reputation for high-quality work and customer satisfaction.

Its skilled professionals have the experience and expertise to handle every aspect of the construction process, from the initial design and planning stages to the final touches and inspections. The company prides itself on detail and ability to deliver projects on time and within budget.

Retail Store Projects

Currently, the company has purchased 20,000 square feet of land for construction.

The initial studies indicate that this shopping center will support a floor-to-area ratio of 20 percent and an 80 percent leasable area ratio. This means that the gross building area (GBA) will be 4000 sq. ft., and the gross leasable area (GLA) will be 16,000 sq. ft.

Below is the list of the clients' requests for leasing space.

Each business will pay a fixed annual rent plus a percentage of gross sales generated. The cash flows from each of the businesses have approximately the same amount of risk. The business names, square footage requirements, and annual expected cash flows for each of the businesses that would like to lease space are provided below:

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Required Business Name Square Feet Expected Annual Cash Flow Videos Now 4,000 $70,000 Gords Gym 3,500 $52,500 Pizza Warehouse 2,500 $52,500 Super Clips 1,500 $25,500 30 1/2 Flavors 1,500 $28,500 S-Mart 12,000 $180,000 Wal Verde Drugs 6,000 $147,000 Multigoal Wireless 1,000 $22,250 Required Business Name Square Feet Expected Annual Cash Flow Videos Now 4,000 $70,000 Gords Gym 3,500 $52,500 Pizza Warehouse 2,500 $52,500 Super Clips 1,500 $25,500 30 1/2 Flavors 1,500 $28,500 S-Mart 12,000 $180,000 Wal Verde Drugs 6,000 $147,000 Multigoal Wireless 1,000 $22,250