Please show all work for a 5 year period.

111 Yale Avenue building has 22,000 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 14%.

TENANT #1: This tenant's offer is for a single net lease at the base rent level of $23 per square foot per year (/sf/yr). After the first year the rent will increase by $1.5/sf/yr. The tenant also requests half off the lease payment due in 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 in your answers.)

TENANT #2: This tenant's offer is for a gross lease at the base rent level of $27/sf/yr. After the first year the rent will follow 100% Consumer Price Index adjustment. The expected annual inflation is 5%. The tenant also requests that the building owner immediately buys the tenant out of its current lease - an arrangement that is worth $150,000.

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 in your answers.)

The operating expenses for the building are expected to be $7/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 #