An office space located within the Dallas Fort-Worth Metroplex currently maintains an annual revenue of $150,000. Operating expenses are $40,000 and the property’s annual debt service is $60,000. In two years the management company will renegotiate their lease. They anticipate that 60% of the operating expenses can be agreed to pass through in a new NNN lease to their current tenants. However, they will be required to reduce their lease rate by $18,000 annually. What is the current net income, what does management anticipate their income will be in 2 years, assuming the lease is renegotiated as described above?

a) $50,000, $74,000

b) $40,000, $86,000

c) $60,000, $74,000

d) $50,000, $80,000