An office space located within the Dallas-Fort Worth Metroplex currently maintains an annual revenue of ($150),000. Operating
Question:
An office space located within the Dallas-Fort Worth Metroplex currently maintains an annual revenue of \($150\),000. Operating expenses are \($40\),000 and the property’s annual debt service is \($60\),000. In two years the management company will renegotiate their lease. They anticipate that the 60% of the operating expenses can be agreed to pass through in a new Triple Net Lease “Net of Taxes, Insurance, and Maintenance” (NNN) to their current tenants. However, they will be required to reduce their lease rate by \($18\),000 annually. What is the current Net Income, and what does management anticipate their income will be in two years, assuming the lease is renegotiated as described above?
a \($50\),000, \($74\),000
b \($40\),000, \($86\),000
c \($60\),000, \($74\),000
d \($50\),000, \($80\),000
Step by Step Answer:
Foundations Of Real Estate Financial Modelling
ISBN: 9781138046184
2nd Edition
Authors: Roger Staiger