Using a discount rate of $12\%,$ which lease options produce the best net effective rent:

a$.$ A building owner charges triple net annual rent of $$22$ per square foot in the first

year of a five$-$year lease. Rents increase $$1\mathrm{.}25$ per year. Per square foot

expenses in the building are expected to be $$6\mathrm{.}50$ in the first year increasing

$$0\mathrm{.}75$ per year over the life of the lease. If the owner provides three $(3)$ months

of free rent in the first year as a concession. The owner also provides $$5\mathrm{.}50$ per

square foot in moving expenses.

b$.$ A building owner charges modified full service rent of $$29$ per square foot in the

first year of a five$-$year lease, with an expense stop set in the first year. Rents

increase $$1\mathrm{.}25$ per year. Per square foot expenses in the building are expected

to be $$6\mathrm{.}50$ in the first year increasing $$0\mathrm{.}75$ per year over the life of the lease. If

the owner provides three $(3)$ months of free rent in the last year as a concession.

The owner also provides $$6\mathrm{.}25$ per square foot in moving expenses.

c$.$ A building owner charges full service rent of $$31$ per square foot in the first year

of a five$-$year lease. Rents increase $$1\mathrm{.}75$ per year. Per square foot expenses in

the building are expected to be $$6\mathrm{.}50$ in the first year increasing $$0\mathrm{.}75$ per year

over the life of the lease. If the owner provides three $(3)$ months of free rent in

the first year as a concession. The owner also provides $$5\mathrm{.}25$ per square foot in

moving expenses.