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A property owner is evaluating the following alternatives for leasing space in his office building for the next five years: Net lease with steps. Rent

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A property owner is evaluating the following alternatives for leasing space in his office building for the next five years: Net lease with steps. Rent will be $15 per square foot the first year and wil increase by $3.40 per square foot each year untif the end of the lease All operating expenses will be paid by the tenant Net lease with CPladjustments. The rent will be $18 per square foot the first yeat. After the first year, the rent will be increased by the amount of any increase in the CPI. The CPI is expected to increase 8 percent per year Gross lease Rent will be $31 per square foot each year with the lessor responsble for payment of all operating experses: Expenses are estimated to be $9 duning the first year and increase by $1 per year thereafter Gross lease with expense stop and CPV adjustment Rent will be $25 the first year and increase by the full amount of any change in the CPl after the first year with an expense stop at $9 per square foot. The CPI and operating expenses are assumed to change by the same amount as outined above Required: a. Calculate the effective rent to the owner (after expenses) for each lease alternative using a 11 percent discount rate b. How would you rank the alternatives in terms of risk to the property ownet? Complete this question by entering your answers in the tabs below. Calculate the effective rent to the uwner (after expenses) for each lease alternative using a 11 percent discount rate Note: Do not round your intermediate calculations. Round your final answers to two decimal places. Complete this question by entering your answers in the tabs below. How would you rank the alternatives in terms of risk to the property owner? Note: Rank the alternatives from the least risky to the most risky

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