1. You own a quality site in Charlotte that is perfect for a grocery store. You have used a broker and negotiated a 20-year ground lease with Kroger for your 150,000 SF site at $4/SF. The new building will be 20,000 SF. The lease includes 5% increases every 5 years, beginning in year 5.
   1. What rental income will you receive from Kroger in year 1?

2. If you wanted to sell the property after year 2 (assuming no vacancy factor and a cap rate of 7%), what is the value of the lease at that time?