Question: The rent will be $20.00 per square foot for the first year. After the first year, the rent will be increased by the amount of

The rent will be $20.00 per square foot for the first

The rent will be $20.00 per square foot for the first year. After the first year, the rent will be increased by the amount of the full increase in the CPI. The CPI is expected to increase 3% per year. The tenant has free rent during the first three months of each year. The lease has an expense stop of $5.00 which is also the amount of expenses in the first year. Expenses are expected to increase by $1.00 per square foot per year. However, during the free rent period of each year, the tenant will pay all operating expenses for that time period only. Once the rent commences, tenant is only responsible for the increase above the stop. Assume a five year lease term. Calculate the effective net rent to the owner (after expenses) for the lease using a 9 percent discount rate. $10.26 $9.93 $10.51 $9.45

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