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Suppose in a certain property market the typical lease term is 5 years, the cap rate (cash yield) is 8%, long term property value and

Suppose in a certain property market the typical lease term is 5 years, the cap rate (cash yield) is 8%, long term property value and rental growth rate is 2.0% per year, leases provide rent step-ups of 2.0% per year (per the expected growth rate), and the tenant borrowing rate (intralease discount rate) is 6%. What is the appropriate inter-lease discount rate?

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