A building owner is evaluating the following alternatives for leasing space in an office building for the next five years. Calculate the effective rent to the owner for each lease alternative using a 12% required rate of return. Option 1: Gross Lease. Rent is $32/ sf and the building owner will pay all operating expenses. Operating expenses are estimated at $10 for the first year with the expectation that expenses will increase by $1.50 per year thereafter