Doctors wish to lease 4000 square feet in your shopping centre. They are willing to sign a 10 year lease at $30 psf. They want $50 psf of tenant improvements and expect 9 months of free rent. You propose a ten year lease with a 10% increase in rents in Year 6.What is the present value per square foot of the proposed deal? Your discount rate is 7% based on a cap rate of 5% and assumed growth rate of 2%. Report your answer with two decimal places.

Please create your own Excel model or use your calculator to determine the PV.

Select one:

a.

$148.45

cross out

b.

$150.12

cross out

c.

$141.10

cross out

d.

None of the above