What should the landlord proposed starting rent be

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1. A landlord has offered a tenant a 20-year lease with annual net rental payments of $30/SF in arrears. The appropriate discount rate is 8%. The tenant has asked the landlord to come back with another proposal, with a lower initial rent in return for annual step-ups of 4% per year. What should the landlord’s proposed starting rent be?

2. A condo has 50 identical units that rent at $1700/month with building operating expenses paid by the landlord equal to $600/mo. On average, there is 3% vacancy. You expect both rents and operating expenses to grow at a rate of 6% per year. The discount rate is 10% per year. How much is the property worth?

Reference no: EM131871006

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