n class work: Industrial Case, Boeing You are are considering purchasing an industrial building on Jan 1, 2018 with 52,400 square feet currently leased by one tenant, Boeing. Before you can make the purchase, you have been asked to pencil out the next flive years of cash years of cash flows. For 2018, Boeing pays $11.10 per square foot in base rent. The base rent is scheduled to increase by $0.25 per square foot each year until the lease expires on Dec 31, 2021. If Boeing renews the lease, it will pay $12.50 per square foot in base rent in 2022. Write out base rent revenue in each year assuming Boeing renews in 2022 2018 2020 2021 2022 per sq ft total 2. You expect Boeing will renew its lease with a 75% probability. If Boeing does not renew, you expect it will take six months to find a new tenant and the new tenant will lease at $12.50 per square foot (like Boeing). Write down potential rent, effective rent and vacancy adjustment for 2022. (Note that potential rent effective rent with a o vacancy adjustment for 2018-2021 since the building is fully leased). vacancy ad 3. The tenant in your building has agreed to pay utilities, taxes and insurance. Utilities are $1.55 per square foot when fully leased (35% fixed). Taxes are SSI,250 per year and insurance is $35,000 and both of these are fixed, what are building expenses (and recoveries, since the building is fully leased) each year from 2018-2021? 2021 Taxes Total 4. What are expected expenses in 2022? (Assume utilities, taxes, insurance bills accrue monthly) Utlities Taxes Total