Question

8) Tenant prospect FI 318, needs at least 8,400 USF of office space for its rapidly growing business. Three (3) landlords A/B/C have each offered FI 318 10,000 RSF at the market rental rate of $50/RSF+tenant electric with the following load factors: A) 18% B) 28% C) 8%. What is the annual rent for each space? Which space should FI 318 lease?

Answer 1

Case 1 : If tenant electric is 18% :-

Annual rent = (10000*50)+ 18% of (10000*50) = 590000

Case 2 : If tenant electric is 28% :-

Annual rent = (10000*50) + 28% of (10000*50) = 640000

Case 3 : If tenant electric is 8% :-

Annual rent = (10000*50) + 8% of (10000*50) = 540000

on the basis of above calculation, least rent is in case 3 therefore tenant should go with 8% electric duty