Reference no: EM133110102

Develop a ?ve year proforma and estimate the cash ?ows the property will received under the extreme assumption that the anchor space will remain vacant forever. {This can be viewed as a lower bound for the value of the property). For this exercise, ignore the information show in Exhibits 9 and 1t}. Rather, assume when a lease expires, the broker is able to resign the same tenant to a new seven year lease T595: of the time at current market rent, which is currently $27 and is rising at 2% per year. Assume all inline leases contain a 2% annual escalation of rent. Expense reimbursements (per SF] also grow at 2%, but are not received from vacant space. You may assume operating expenses in 2010 will be $268,?15 and grow at 2% regardless of occupancy. Current and future vacant inline space is ?lled and commissions are paid as described in the case. You may assume that you incur a $1?fSF tenant improvement expense (Tl) for renewing inline tenants and a $25.!SF Tl for new inline tenants. Estimate this lower bound for the current value of the property. Highlight and justify any additional assumptions you make.