1) A building has 30 floors, with 100K ft.² of rentable area equally distributed across all floors. If this entire building were rented to a single tenant, the owner could charge rent equal to $4.5M, or $42.00/ft.².However, the owner plans to use the building's ground floor for the lobby and the second floor for the employees' cafeteria - both to be shared by all tenants in the building. Furthermore, the owner will subdivide the other eighteen floors into numerous smaller units - the partitions eliminate 20% of the rentable area on each floor.

a) Calculate two separate load factors:(i) the load factor to account for the fact that two floors are shared by all tenants and (ii) the load factor to account for the fact each floor is partitioned into multiple smaller spaces.

b) Continuing with the same problem, now, what must the total load factor be in order for the owner to obtain the same amount of rental income as could be obtained from a single tenant?(Show all work.)

c) What must the price per square foot then be in order for the owner to obtain the same amount of rental income as could be obtained from a single tenant?(Show all work.)

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Calculating Load Factors and Rental Strategies a Load Factors i Shared Floors Total area of shared f... View the full answer