]You are working on cash [The information presented here applies to questions below flow projections for...

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]You are working on cash [The information presented here applies to questions below flow projections for a 32,000 square foot office building which is occupied by two tenants, A and B. The lease for tenant A, who occupies 20,000 square feet of space, is expiring in 5 years. You expect to receive the market rent in year 6, $42.00/sf, whether tenant A decides to renew or vacate. If tenant B will pay $40.00/sf to rent 12,000 square feet of space in year 6, what is the building's expected potential gross income for that year? Question 5 Tenant A's lease expires in year 5 and you expect them to renew with probability .85. If they do not renew, you expect that it will take about 6 months to find a new tenant for the space. What is the effective gross income you expect to receive in year 6? Question 6 What is the expected occupancy rate in year 6? Question 7 The leases for both tenants are triple net; tenants pay property taxes, insurance, and maintenance. The owner is responsible for utilities and sewage. The expected annual cost for these services is $3.20/sf. What is the expected utility and sewage expense in year 6 if the expenses are 25% fixed? Question 8 Given no other expenses, what is NOI for year 6 of ownership? Question 9 What is the price you expect to receive for the building based on an 8% cap rate if you sell it in year 5? ]You are working on cash [The information presented here applies to questions below flow projections for a 32,000 square foot office building which is occupied by two tenants, A and B. The lease for tenant A, who occupies 20,000 square feet of space, is expiring in 5 years. You expect to receive the market rent in year 6, $42.00/sf, whether tenant A decides to renew or vacate. If tenant B will pay $40.00/sf to rent 12,000 square feet of space in year 6, what is the building's expected potential gross income for that year? Question 5 Tenant A's lease expires in year 5 and you expect them to renew with probability .85. If they do not renew, you expect that it will take about 6 months to find a new tenant for the space. What is the effective gross income you expect to receive in year 6? Question 6 What is the expected occupancy rate in year 6? Question 7 The leases for both tenants are triple net; tenants pay property taxes, insurance, and maintenance. The owner is responsible for utilities and sewage. The expected annual cost for these services is $3.20/sf. What is the expected utility and sewage expense in year 6 if the expenses are 25% fixed? Question 8 Given no other expenses, what is NOI for year 6 of ownership? Question 9 What is the price you expect to receive for the building based on an 8% cap rate if you sell it in year 5?

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Answer 5 If Tenant A renews their lease they will continue paying the current rent of 3800sf If they do not renew it will take about 6 months to find a new tenant for the space Therefore we can calcul... View the full answer