You are leasing the 15th floor of a 25 story property. Your lease specifies the first year annual base rent of $80 per square foot, with annual increases of $2 per square foot. The 15th floor has net rentable area of 30,000 sf of the buildings total square feet of 600,000. Assume the following regarding operating expenses: Total operating expenses, including property tax in year 1 are $10,000,000. Year 2 operating expenses increase by 1% to 10,100,000. Year 3 operating expenses decrease by 50% to $5,000,000.

Calculate your annual rent expense for years 1- 3 assuming this is an absolute triple net lease. Same facts, but calculate your annual rent expense for years 1 - 3 assuming it is a base year lease and the first year $80 per square foot rent is inclusive of year 1 operating expenses.