(CHAPTER 9) I recommend solving this problem in Excel. When you do correct referencing to the cells with intermediate results, it will help you avoid any rounding errors. 111 Yale Avenue building has 24,000 square feet of empty space. Two potential tenants have approached the building owner regarding a 5-year lease. The building owner needs to compare their offers and decide which of the two prospective tenants will move in. Assume there will be no negotiations, i.e. a take-it-or-leave-it offer. The building owner's required annual return is 11% TENANT #1: This tenant's offer is for a single net lease at the base rent level of $26.00 per square foot per year (/sf/yr). After the first year the rent will follow 100% Consumer Price Index adjustment. The expected annual inflation is 5%. The tenant also requests that the building owner Days an immediate move-in allowance in the amount 550,000, as well as immediately buys the tenant out of its current tease's last year an arrangement that is worth $200,000 In the table below fill out the building.cwners.net.rents.sty according to this tenant's offer. (Round your answers to 2 decimal places. Do not use the "S" signs.) year 2 year year Effective net rent/styr to the building owner TENANT #2: This tenant's offer is for a gross lease at the base rent level of $31.00/styr. After the first year the rent will increase by $1.50/sfyr. In the table below fill out the building owner's net rent sty according to this tenant's offer. (Round your answers to 2 decimal places. Do not use the "S" signs.) year 2 year 4 years Effective net rent/sfy to the building owner $ $ $ The operating expenses for the building are expected to be $4.50/sly during the coming year, and are expected to increase after that in $1.00/sfyr increments. BUILDING OWNER'S DECISION: If the building owner prefers an offer that brings the most money on average each year, considering the owner's required return, it should be the offer from Tenant (Put 1 for Tenant #1 or 2 for Tenant 2.)