3. (30 points) 25 A property owner is considering 2 alternatives for leasing space in his office building for the next three years. The first alternative is a net lease agreement of $14 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is net and yearly expenses per square foot are as follows: $6,00, $6.65, and $7.05. As this is a net lease, the tenant will pay all expenses. If the lease term is three years and the discount rate is 10%, what is the effective rent per square foot? (14 points) 14,00 (z2hd 20.0p (325 (4)4 33.70 1 : CF = I fv NPv g35 The second alternative is a gross lease agreement with expense stops. The space is leased at $21.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gros with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. If the lease term is three years and the discount rate is 10%, what is the effective rent per square foot? (14 points) 3. (30 points) 25 A property owner is considering 2 alternatives for leasing space in his office building for the next three years. The first alternative is a net lease agreement of $14 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is net and yearly expenses per square foot are as follows: $6,00, $6.65, and $7.05. As this is a net lease, the tenant will pay all expenses. If the lease term is three years and the discount rate is 10%, what is the effective rent per square foot? (14 points) 14,00 (z2hd 20.0p (325 (4)4 33.70 1 : CF = I fv NPv g35 The second alternative is a gross lease agreement with expense stops. The space is leased at $21.00 per square foot during the first year with $2.00 step-up provisions each of the following years. The lease is gros with an expense stop set at $6.65 per square foot, and yearly expenses per square foot are as follows: $6.00, $6.65, and $7.05. If the lease term is three years and the discount rate is 10%, what is the effective rent per square foot? (14 points)