Question
Webster Office Plaza, a 17-story office property with 438,338 square feet of rentable area. Estimates of revenue used to compile this statement are based on
Webster Office Plaza, a 17-story office property with 438,338 square feet of rentable area. Estimates of revenue used to compile this statement are based on a total of 65 leases, which include a combination of flat, step-up, and indexed rents. Based on the rentable area, and assuming full occupancy, a weighted average has been used to estimate total rent at $28.73 per rentable square foot for the coming year. The property also should produce other income from some retail services, cell tower rents, and parking and storage fees and are estimated to be $442,935. Expected expense recoveries from tenants are $1,032,322. This amount was estimated by reviewing expense provisions in each of the 65 leases. Vacant space is estimated to be equivalent to 5 percent of gross rent. Concessions (moving allowances and rent discounts given to new tenants) are estimated at 1.4 percent are deducted from revenues. What is the effective gross income?
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