You are the owner of a 200,000 square foot office building designed for and leased to a single corporate tenant. Operating Expenses are currently total $9.75 per square foot, of which $1.25 represents the cost of heating. The tenant's current expense stop is $6.50 per square foot, and operating expenses are expected to grow at 2.5% per year. The lease expires in two years. You are considering an upgrade to the heating system which will cost $125,000 to install and will reduce heating costs by $0.10 per square foot per year. 

(1) What is the total dollar proft to the landlord during the remainder of the current lease? 

(2) What are the total energy savings over the expected 15 year life of the upgraded system? (3) How much of that will pass to the landlord?

Answer rating: 100% (QA)

1 The total dollar proft to the landlord during ... View the full answer