https://1drv.ms/x/s!AuStKxGv-DGdgWpqOkpi4_mMxo-d?e=KIuo35

THE LEASE RECONFIGURATION PLAN As Wilson stared at the forecasted rents (see Exhibit 1) for the next two years for the suites in Sunrise Atrium, he wondered how he could maximize cash flow from the property. He realized there were a number of requirements that he would have to incorporate in his plan. There should be at least 12 months of lease term remaining for tenants who were granted the holiday since this could be important to a buyer who would be put off by the prospect of having the highest rental rate tenants expire too soon after the sale. Wilson decided to limit the maximum number of months of rent holiday to six as a way to avoid too drastic a rent increase. He decided to fix the property sale date as January 2009, which gave him a 12-month window. The total value of the skipped payments from the holiday period would have to be allocated equally over the months in the post-holiday period. Presently the maximum annual rent per square foot being paid by any tenant in the building was $22.50. Considering that figure (as well as market information for rents in buildings of similar characteristics like age, utility, access and curb appeal), Wilson decided he did not want any tenant's rent to exceed $24 per square foot after the lease adjustment. Wilson was aware that negotiating the terms of the rent holiday with the tenant would require an investment in time and effort. Accordingly, he felt that choosing more than six tenants was not feasible. Wilson realized that, in order to estimate the sales value of the property, he would have to anticipate a market cap rate a year from the present date. A cap rate of seven per cent to eight per cent seemed appropriate for the situation. Finally, Wilson decided that the discount rate applied for the valuation should be nine per cent, which was the company's risk adjusted rate of return for its investors. With these assumptions in hand, Wilson began to feel optimistic about coming up with a lease reconfiguration plan that would add value for the investors