I recommend solving this problem in Excel. When you do correct referencing to the cells with intermediate results, it will help you avoid any rounding errors. 100 N. Barranca Street building has 18,000 square feet of empty space. Two potential tenants have approached the building owner regarding a 5-year lease. The building owner needs to compare their offers and decide which of the two prospective tenants will move in. Assume there will be no negotiations, i.e. a take-it- or-leave-it offer. The building owner's required annual return is 13% TENANT #1: This tenant's offer is for a single net lease at the base rent level of $21 per square foot per year (/sf/yr). After the first year the rent will increase by $2/sf/yr. The tenant also requests a 50% discount during the last year of the lease term. In the table below fill out the building owner's net rents/sf/yr according to this tenant's offer, (Round your answers to 2 decimal places. Do not use the "$" signs.) year 1 Iyear 2 Iyear 3 year 4 Iyear 5 Effective net rent/sf/yr to the building owner $ $ $ $ $ TENANT #2: This tenant's offer is for a gross lease at the base rent level of $25/sf/yr. After the first year the rent will follow 100% Consumer Price Index adjustment. The expected annual inflation is 4%. The tenant also requests that the building owner pays an immediate move-in allowance in the amount $100,000. In the table below fill out the building owner's net rents/sf/yr according to this tenant's offer. (Round your answers to 2 decimal places. Do not use the "$" signs.) year 1 year 2 year 3 year 4 year 5 Effective net rent/sf/yr to the building owner $ $ The operating expenses for the building are expected to be $5/sf/yr during the coming year, and are expected to increase after that in $0.50/sf/yr increments. BUILDING OWNER'S DECISION: If the building owner prefers an offer that brings the most money on average each year, considering the owner's required return, it should be the offer from Tenant # (Put 1 for Tenant #1 or 2 for Tenant #2.)