A property is leased for $100 NNN (triple net) with no rent increases for 50 years. However the owner of this asset is liable for a sizable TI $ and broker's fees $110 due in year 6. If you are acquiring the asset in year 0, and selling in year 3, does the required broker's fee in year 6 affect your valuation analysis ? Please provide a simple explanation why. Assume that all buyers always require a 10% return.

Answer rating: 100% (QA)

Yes the required brokers fee in year 6 would affect your valuation analysis when acquiring the asset ... View the full answer