An owner of the Atrium Tower is currently negotiating a 5 year lease with ACME Corp. for 20,000 rentable SF.ACME would like a base rent of $25/SF with step-ups of $1/year beginning one year from now.

a) What is the present value of cash flows to Atrium (assume A 10% discount rate)

b) The owner of ATRIUM believes that the Base rent of $25/SF in (a) is too low and wants to raisethat amount to $29 with the same step-ups. If so, Atrium would provide ACME with a $50,000 moving allowance and $150,000 in tenant improvements. What is the PV of this alternative and the effective rent.

c) ACME informs ATRIUM it will pay $23/SF but must buyout one year left on its existing lease ($15/SF on 20,000/SF); no moving allowance or tenant Improvements. What is the PV of this alternative and the effective rent.