Assume an apartment has a floor area of 3,000 SF. The existing rent per month is $3,000. The market level rent is $15,000 per month. Assume that the tenant is willing to enter into a voluntary vacate agreement to be bought out of his lease and that you are now negotiating a buy out price. The apartment requires an additional $200,000 in renovation to get it up to market standards. If a prevailing cap rate for this apartment is 4.0%, at what buy out price is the incremental value created by the landlord for this unit after renovations equal to zero? O $3,40,000 O $2,350,000 O $1,000,000 $3,100,000
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- The owner of a local restaurant needs to decide between two lease options as presented below for the next 3 years. Option 1: A fixed fee of 540,000 plus 4% of the total sales. Option 2: Afixed fee of 560,000 plus 2% of the total sales. The business is recently crated, and the owner's projected sales will reach 5700,000 in the third year: and it will grow by 10% per year for the next several years. Which one of the following would you recommend, and why? - More information is neede a to solve for the answer Either option does not make differrece because the amount of revenues 25 51,000,000 is the Indifference Pont. Phis it doesn't matter Select the Oation I for the neast 3 yearse and renew the lease contract in thie fourth yor wili De kution 2 Select the Ostion 2 for the first 3 years, and switch it to the Opeis a The theoretinaYou are considering leasing a car. You notice an ad that says you can lease the car you want for R477.00 per month. The lease term is 60 months with the first payment due at inception of the lease. You must also make an additional down payment of R2,370. The ad also says that the residual value of the vehicle is R20,430. After much research, you have concluded that you could buy the car for a total "driveout" price of R33,800. What is the quoted annual interest rate you will pay with the lease?In order to induce a tenant to move into your shopping center, you must pay a $1.1 million tenant improvement allowance to fit out their space. The tenant agrees to lease 18,000 square feet of space at $45 per square foot. Lease term is ten years. Rate of Return is 10% What is the effective rent?
- You have to buy a new copier. The cost of the copier is $1,900, plus $415 per year in maintenance costs. The copier will last for five years. Alternatively, a local company offers to lease the copier to you and do the maintenance as well. If your discount rate is 6.5%, what is the most you would be willing to pay per year to lease the copier (your first lease payment is due in one year)? (Select the best choice below.) A. The most you would be willing to pay per year to lease the copier is $415. B. The most you would be willing to pay per year to lease the copier is $3,624.61. C. The most you would be willing to pay per year to lease the copier is $872.21. D. The most you would be willing to pay per year to lease the copier is $1,900.A landlord is evaluating his investment in a new residential apartment building. According to his evaluation, internal rate of return on this investment is 8% if (i) annual rent is $70,000 for 10 years and (ii) resale value of the building is 6% of the initial value at the end of the 10th year. What is the purchase price of the building? (Do not use the $ sign and round your answer to the nearest $ value)A property owner is evaluating the following alternatives for leasing space in his office building for the next five years: Net lease with CPI adjustments. The rent will be $16 per square foot the first year. After the first year, the rent will be increased by the amount of any increase in the CPI. The CPI is expected to increase 7 percent per year. Calculate the effective rent to the owner (after expenses) for the lease using a 10 percent discount rate.
- Consider an 18,000 SF shopping center where all tenants pay $20 per square foot, triple-net. Assume that operating expenses include real estate taxes of $50,000, insurance of $14,000, and CAM of $26,000. If a tenant requested full service gross (FSG) lease rather than a triple-net (NNN) lease, at what lease rate would the owner be indifferent between the two? $25.00 $25.50 $26.00 $26.50 $27.00You are thinking of renovating a basement apartment beneath your house, which you currently rent out for $521 per month. If you renovate the apartment, you could get $729 per month instead, starting next month. Assume renovations would cost $10,000, paid immediately, and would take very little time to complete so there’d be no delay in rental income. Assume monthly rental income would last for the foreseeable future (aka forever). If the applicable discount rate is 6% per year, what is the net present value (NPV) of the renovations? Round to the nearest cent.You are a landlord and want to figure out the value of a potential lease. The lease is for 15,000 square feet with a term of 5 years at a rate of $18 per square foot per year. All expenses are paid by the tenant. In order to sign this lease you will need to pay $75,000 upfront in tenant improvements and another $50,000 in leasing commissions. What is the value of the lease per SQ FT per year assuming a 6% discount rate? Group of answer choices $14.50 $15.02 $16.13 $16.31 Please answer fast I give you upvote.
- You are considering either leasing or purchasing a car. You notice an ad that says you can lease the car you want for $229.00 per month. The lease term is 48 months with the first payment due at inception of the lease. You must also make an additional down payment of $1,120. The ad also says that the residual value of the vehicle is $12,760. The list price of the vehicle is $20,274, but after much research, you have concluded that you could buy the car for a total "drive-out" price of $18,600. What is the quoted annual interest rate you are actually paying with the lease? 10.23% 10.38% 7.21% 7.11% 8.22%Using a discounted present value model of house prices, is it worth carrying out a renovation costing $30,000 if it raises the monthly rental price by $200 where the depreciation rate is 2%, the tax rate is 1%, the real risk-free rate is 1%, and the expected real growth rate of rents is 1%?A real estate broker decides to lease a car for 36 months. Suppose the annual interest rate is 7.8%, the negotiated price is $49,000, there is no trade-in, and the down payment is $4,000. Find the monthly lease payment (in dollars). Assume that the residual value is 49% of the MSRP of $51,5000. Round your answer to the nearest cent.