3. What distinguishes a power centre from a regional shopping centre? (1) A power centre will typically have one anchor tenant. (2) A power centre has a larger primary trade area than a regional shopping centre. (3) Power centres are typically closed centres anchored by big-box retailers. (4) A power centre may have anchor tenants who take up to 90% of the centre's total square footage. You are considering the purchase of a retail strip mall anchored by a grocery store. Analysis indicates that all of the retail tenants' leases are at current market rental rates. However, the anchor is currently paying $3.50 net per year when the market for comparable space is $10.00. Lease Term: 5 years remaining Discount Rate: 10% per annum, compounded annually Store Size: 33,000 sq. ft. Calculate the discount (rounded to the nearest $100) you would build into your offer to account for the below-market lease as compared to a centre where all leases were at current market rates. (Recall that lease payments are payable annually at the beginning of the compounding period.) (1) $1,376,100 (2) $894,400 (3) $481,600 (4) $713,100