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Effective rent calculation Using a discount rate of 8%, compute the effective rent (per square foot) of a ten-year net lease. The lease provides for

Effective rent calculation

Using a discount rate of 8%, compute the effective rent (per square foot) of a ten-year net lease. The lease provides for a net rent of $12/sf in the first year, increasing by $1/sf each year thereafter. The lease contains a front-end six-month concession. In the sixth year of the lease, the landlord will paint the tenants space, equal in value to $3/sf. To assist you, you are being provided a grid:

Year

Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

Cash Flow

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