Suppose the Lease on a Certain Space Will Expire at the Beginning

question 11

Multiple Choice

Suppose the lease on a certain space will expire at the beginning of this year. You believe that the probability of the existing tenant renewing is 50 percent. If he renews, you will need to spend only an estimated $5.00/SF to upgrade his space. If he does not renew, it will take $25.00/SF to modernize the space, even then you expect 6 months of vacancy. What expected cash flow forecast should you put in your pro forma for this space, if you expect triple-net market rents on new leases to be $20/SF?

• A) $17.50/SF
• B) $15.00/SF
• C) Zero
• D) - $10.00/SF
• E) -$5.00

---

Definitions:

Free Expression

The uninhibited sharing of thoughts, feelings, or ideas, often encouraged in therapeutic or creative settings to foster openness and discovery.

Vague Terms

Phrases or words that lack clarity or specificity and can lead to misunderstandings or ambiguous interpretations.

Jargon

Specialized language used by a particular group or profession, designed to convey complex ideas efficiently among members, but often difficult for outsiders to understand.

Personalizes Statements

Adjusting language or communication to make it more directly related to or reflective of an individual's experiences, feelings, or perspectives.