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Use Excel to calculate the Effective Gross Income over each of the next three years (calendar years 2022, 2023, 2024) for the office building described during Thursdays lecture. It is a single-floor building with three tenants.

Assume no vacancy on rented suites and 1% bad debt. If a lease ends, assume that the tenant vacates and it takes 12 months to release at the same terms. The building is rectangular 200 feet by 400 feet and has a 1.21 Load Factor. The following table shows the historical and expected expenses at the building level. Also, the annual rate of inflation is given. All expenses were set in 2018 and grow annually by previous years inflation.

Building Expenses		2018	2019	2020	2021	2022	2023	2024
	Management	$15,000	$15,360	$15,636	$15,824	$16,584	$16,982	$17,372
	Repairs	$20,000	$20,480	$20,849	$21,099	$22,112	$22,642	$23,163
	Utilities	$22,500	$23,040	$23,455	$23,736	$24,876	$25,473	$26,058
	Property Tax	$42,000	$43,008	$43,782	$44,308	$46,434	$47,549	$48,642
	Debt Service	$60,800	$62,259	$63,380	$64,140	$67,219	$68,832	$70,416
	Building Insurance	$20,000	$20,480	$20,849	$21,099	$22,112	$22,642	$23,163
	Lease Commissions	$17,500	$17,920	$18,243	$18,461	$19,348	$19,812	$20,268
	CAM	$30,000	$30,720	$31,273	$31,648	$33,167	$33,963	$34,745
	CPI Increase	2.4%	1.8%	1.2%	4.8%	2.4%	2.3%

Lessee specific information

Tenant 1 (BBF) is a brokerage firm that originally signed a 4-year lease for 33,000 sqft starting January 2020 with an initial base rent of $20.00 per sqft. On January 1^st, their base rent is indexed by trailing annual inflation (CPI). BBF also pays 100% of its proportion (by rentable area) of all recoverable expenses and common area charges. BFF has a zero breakpoint and zero expense stop.

Tenant 2 (Two Wheel) is a scooter sales company that signed a 10-year, 16,000 sqft lease starting January 2018 with an initial base rent of $21.00 per sqft. The base rent increases by 2% at the beginning of each even year (every other year). Two Wheel will also pay percentage rent equal to 20% of gross sales. They have a $1,000,000 breakpoint level. This is a gross lease. Two Wheel executed $900,000 in sales during 2018 and sales have grown by 10% per year so far. Assume that this growth rate will continue.

Tenant 3 (Al Dente) is a dentist who started a 5-year lease in January 2021 with an initial base rent of $18.00 per sqft that excallates by 3% per year. This lease is for 17,000 sqft with a zero breakpoint and $1 per sqft expense stop. This occupier will also pay 20% of the gross CAM charge.

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