An office building has two floors of rentable space with a single tenant on each floor. All leases in the building are structured as NNN ("Triple Net") leases, and all operating expenses can be passed through to the tenants of the building.

The first floor has 5,000 square feet of rentable space and is currently leased to a tenant who has occupied the building for the past three years. The rent for the space today (year 1 of your analysis) is $20 per square foot per year. Per the lease, the rent will increase annually by $0.50 per square foot per year (thus beginning in year 2 of your analysis).

The second floor has 5,000 square feet of rentable space and is currently vacant. You anticipate that you will be able to lease the space at the beginning of year 2 of your analysis. You anticipate that you will be able to lease the space at $21 per square per year and will be able to increase the rent annually by $0.50 per square per year.

Estimated total building operating expenses for year 1 of your analysis will be $100,000 ($10/square foot).

Each tenant will pay for their pro-rata share of total operating expenses regardless of the building's occupancy. Therefore, if the building is 50% occupied, then the tenant that represents that 50% of the rentable area would only be responsible for 50% of the total operating expenses.

Assume that the landlord pays all of the operating expenses, and the tenant reimburses the landlord.

All operating expenses are projected to increase by 2% per year.

Using the Excel template, solve for the following:

A) TotalPotentialGrossIncomebytenantandintotalforthepropertyforeachofthenext three years.

B) OperatingExpensesintotalfortheentirepropertyforeachofthenextthreeyears.

C) OperatingExpenseReimbursementsowedtothelandlordbyeachofthetenantsandin

total for the property for each of the next three years.

D) Project the property's Effective Gross Income (EGI) for each of the next three years.

E) Project the property's Net Operating Income (NOI) for each of the next three years.