Using a spreadsheet program $($Microsoft Excel$)$ to solve this problem.

A property has $10,800$ sq$.$ ft of leasable space. The tenant signed a lease starting Jan $1,$ three years ago.

Terms of the lease are as follows:

$$12$ sq ft annually for the first $3$ years.

$$14$ sq ft annually for next $3$ years

$ $15\mathrm{.}50$ sq ft annually for the next $3$ years.

Tenant is responsible for all operating expenses.

There are no vacancy and collection losses during the the lease term. On lease completion, owner expects the property to be vacant for four months. When the property is released under short$-$term leases, with tenants paying all expenses, a vacancy and collection loss allowance of $9$ percent per year is projected.

The current market rental for similar properties under triple net leases is around $$12\mathrm{.}25$ per sq$.$ ft$.,$ and this rate is increasing at the rate of $1\mathrm{.}5$ percent per year. The market discount rate for similar properties is $14\mathrm{.}5$ percent, the "going$-$in$"$ cap rate is $9\mathrm{.}25$ percent and terminal cap rates are typically $1\mathrm{.}75$ percent above the going$-$in cap rates. Selling expenses are $5$ percent and capital expenses are $6$ percent per year.

Build a financial model with computing NOIs, and net proceeds from sale at the end of nine$-$year holding period.

Using this information, estimate the market value of the property.

The Excel sheet should be an active sheet $$ means the formula should be enabled in each cell. DO NOT just copy & paste the values or manually input the values in the cells. If so$,$ you will be awarded zero points. This project will help you become familiar with Excel and be useful in your future classes and even at work. You can use the sample Excel file Download sample Excel fileDownload sample Excel file to help you complete this assignment.

Hints:

You need a total of at least nine years of CF$.$ Since three years have passed, use the lease terms for the remaining period $($six years$).$ The last three years will be based on the current market rates.