Business
Business, 15.02.2020 05:25, kyliearnell

A building owner is evaluating the following alternatives for leasing space in an office building for the next five years:

(a) Net lease with steps. Rent will be $15 per square foot the first year and will increase by $1.50 per square foot each year until the end of the lease. All operating expenses will be paid by the tenant.
(b) Net lease with CPI adjustments. The rent will be $16 psf the first year. After the first year, the rent will be increased by the amount of any increase in the CPI. The CPI is expected to increase by 3 percent per year.
(c) Gross lease. Rent will be $30 psf each year with the lessor responsible for payment of all operating expenses. Expenses are estimated to be $9 psf during the first year and increase by $1 psf per year thereafter. Gross lease with expense stop and CPI adjustment. Rent will be $22 the first year and increase by the full amount of any change in the CPI after the first year with an expense stop at $9 psf. The CPI and operating expenses are assumed to change by the same amount as outlined above.

How would you rank the alternatives in terms of risk to the property owner?

answer
Answers: 2

Other questions on the subject: Business

image
Business, 22.06.2019 00:00, helpmeplease95
Pettijohn inc. the balance sheet and income statement shown below are for pettijohn inc. note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. balance sheet (millions of $) assets 2016 cash and securities $ 1,554.0 accounts receivable 9,660.0 inventories 13,440.0 total current assets $24,654.0 net plant and equipment 17,346.0 total assets $42,000.0 liabilities and equity accounts payable $ 7,980.0 notes payable 5,880.0 accruals 4,620.0 total current liabilities $18,480.0 long-term bonds 10,920.0 total debt $29,400.0 common stock 3,360.0 retained earnings 9,240.0 total common equity $12,600.0 total liabilities and equity $42,000.0 income statement (millions of $) 2016 net sales $58,800.0 operating costs except depr'n $54,978.0 depreciation $ 1,029.0 earnings bef int and taxes (ebit) $ 2,793.0 less interest 1,050.0 earnings before taxes (ebt) $ 1,743.0 taxes $ 610.1 net income $ 1,133.0 other data: shares outstanding (millions) 175.00 common dividends $ 509.83 int rate on notes payable 1. what is the firm's current ratio? (points : 6) 0.97 1.08 1.20 1.33 2. what is the firm's quick ratio? (points : 6) 0.49 0.61 0.73 0.87 3. what is the firm's total assets turnover? (points : 6) 0.90 1.12 1.40 1.68 4. what is the firm's inventory turnover ratio? (points : 6) 4.38 4.59 4.82 5.06 5. what is the firm's debt ratio? (points : 6) 45.93% 51.03% 56.70% 70.00% 6. what is the firm's roa? (points : 6) 2.70% 2.97% 3.26% 3.59% 7. what is the firm's roe? (points : 6) 8.54% 8.99% 9.44% 9.91%
Answers: 2
image
Business, 22.06.2019 01:40, Cosio
Kis the insured and p is the sole beneficiary on a life insurance policy. both are involved in a fatal accident where k dies before p. under the common disaster provision, which of these statements is true?
Answers: 1
image
Business, 22.06.2019 14:30, 20guadalupee73248
The face of a company is often that of the lowest paid employees who meet the customers. select one: true false
Answers: 1
image
Business, 22.06.2019 17:10, suxy16
Calculate riverside’s financial ratios for 2014. assume that riverside had $1,000,000 in lease payments and $1,400,000 in debt principal repayments in 2014. (hint: use the book discussion to identify the applicable ratios.)
Answers: 3
Do you know the correct answer?
A building owner is evaluating the following alternatives for leasing space in an office building fo...

Questions in other subjects: