You have been asked to develop a pro forma statement of cash flow for Betts Distribution Center, an Internet-based order fulfillment/distribution/office/warehouse property. In addition to recoverable operating expenses, the new tenant will be billed for pass throughs including insurance and property taxes, which will then be paid by the owner. The information given to you is listed below.

Property Information:

BETTS DISTRIBUTION CENTER
Age of Improvement	8 years old
Rentable Space	210,000 square feet
Single Tenant	10-year lease term, net, net

Financial Information:

Rent	$7.00 per square feet (7-year term), flat
Recoverable Expenses from Tenant	$2.00 per square feet, fixed
Operating Expenses	$725,000
Property Taxes	$51,000
Insurance	$16,000

Other Cash Outlays:

Allowances for:
Recurring CAPEX/Improve Allowance	$62,500

Required:

a. Develop a pro forma statement for the Betts property for a base year showing net operating income (NOI).