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What is the effective rent of tenant b proposal

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Reference no: EM133089327

Question - You are looking to fill a vacant 10,000 sq. ft. space in one of the buildings you manage. You are considering lease proposals by two potential tenants. All tenant improvements are made in the current year (Month 0). The lease proposals are as follows:

Tenant A

-$8,750 monthly rent

-$175,000 TI allowance

-7-year term

-10.25% discount rate

Tenant B

-$11,650 monthly rent

-$230,000 TI allowance

-5-year term

-10.25% discount rate

Required - What is the effective rent of Tenant B's proposal?

a. $8.08 per sq. ft. per year

b. $9.36 per sq. ft. per year

c. $9.49 per sq. ft. per year

d. Lease terms must be the same to calculate.

Reference no: EM133089327

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