Real Estate Financial Modeling

Landlord and Tenant Perspective Comparative Lease Analysis

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Copyright 2013 by Real Estate Financial Modeling, LLC. All rights reserved.
 LANDLORD PERSPECTIVE Lease Type Definitions:
Bas e Rent, PSF Pa rki ng Rent, PSF S
NNN = Tenant is billed directly for, or reimburses ALL Les s Operating & Mai ntenance Expens es , PSF Les s Real Estate Taxes , PSF L
XYZ Company 7/30/2017 operating and RE taxes and electric in full, starting in Base $80.00
123 Main Street, Suite 2100, New York, NY 10001 Year. These dollar amounts will show up in the Service Charge
line item. $60.00

Basic Lease Terms: Gross = Tenant reimburses all operating and RE taxes, but
NO electric, for all amounts in EXCESS OF Base Year amount$40.00
Lease Rentable Area 5,000 SF (thus in Base Year there are no reimbursements from tenant).
Lease Term (multiples of 12 months only; maximum of 120 ### 48 months These dollar amounts will show up in the Service Charge line $20.00
item.
Parking per 1,000 RSF & Total ### 10.00 spots
$0.00
Initial Monthly Parking Rent per Spot $125.00 Full Service = Tenant reimburses all operating and RE taxes
AND electric, for all amounts in EXCESS OF Base Year Year 1 Year 2 Year 3 Year 4 Year 5 Year
Lease Type Full Service amount (thus in Base Year there are no reimbursements from($20.00)
Free Rent ### 13 months tenant). These dollar amounts will show up in the Service
Tenant Improvement Allowance $50,000 $10.00 PSF Charge line item. ($40.00)
Other Landlord Concession $5,000 $1.00 PSF
Free Rent Calendar
Free Rent At Beginning of Year 13 months 1 months 0 months 0 months 0 months
Free Rent At End of Year 1 months 0 months 0 months 0 months 0 months

Initial & Average Rental Rates: Annual Average Projection

Base Year scalationAnnual Rate Year 1 Year 2 Year 3 Year 4 Year 5
Base Rent, PSF $57.00 2.00% $58.73 Base Rent, PSF 57.00 58.14 59.30 60.49 0.00
Parking Rent, PSF $3.00 2.00% $3.09 Parking Rent, PSF 3.00 3.06 3.12 3.18 0.00
Storage Rent, PSF $0.00 0.00% $0.00 Storage Rent, PSF 0.00 0.00 0.00 0.00 0.00
Service Charge, PSF $0.00 $0.75 Service Charge, PSF 0.00 0.49 0.99 1.51 0.00
Percentage Rent, PSF 3.00% $0.09 $0.12 Percentage Rent, PSF 0.09 0.11 0.13 0.15 0.00
Total Rent & Service Charge $60.09 Total Rent & Service Charge 60.09 61.80 63.55 65.34 0.00
Less Operating & Maintenance Expenses $10.00 3.00% ($10.46) (10.00)
Less Operating & Maintenance Expenses, PSF (10.30) (10.61) (10.93) 0.00
Less Real Estate Taxes, PSF $5.00 2.00% ($5.15) Less Real Estate Taxes, PSF (5.00) (5.10) (5.20) (5.31) 0.00
Less Electricity, PSF $3.00 3.00% ($3.14) Less Electricity, PSF (3.00) (3.09) (3.18) (3.28) 0.00
Annual Lease Income Net of Expenses, P $42.09 PSF $43.94 PSF Annual Lease Income Net of Expense $42.09 $43.31 $44.55 $45.82 $0.00
Annual Lease Income Net of Expenses $210,450 $219,724 Annual Lease Income Net of Expense$210,450 $216,549 $222,773 $229,124 $0
Average Monthly Lease Income $17,538 $18,310 Average Monthly Lease Income $17,538 $18,046 $18,564 $19,094 $0

Average
Other Cash Impacts: Value Base Year Annual Rate Other Cash Impacts:
Free Rent 13 months ($57.00) ($15.46) Free Rent (57.00) (4.85) 0.00 0.00 0.00
Tenant Improvement Allowance $50,000 ($10.00) ($2.50) Tenant Improvement Allowance (10.00)
Leasing Commissions $0 $0.00 $0.00 Leasing Commissions 0.00
Other Landlord Concession ($1.00) ($0.25) Other Landlord Concessions (1.00)
Net Effective Rent with Percentage Rent ### $25.73 PSF Net Cash Flow PSF ($25.91) $38.46 $44.55 $45.82 $0.00
without Percentage Rent $25.61 PSF vs. to Tenant ($7.09) ($56.95) ($63.55) ($65.34) $0.00
Difference ($33.00) ($18.49) ($18.99) ($19.51) $0.00
Total Net Cash Flow $514,670
NPV Net Cash Flow 10.00% $365,040 Total Annual Net Cash Flow ### $192,324 $222,773 $229,124 $0

Percentage Rent Calculation Growth Year 1 Year 2 Year 3 Year 4 Year 5

 TENANT PERSPECTIVE Lease Type Definitions:
Ba s e Rent, PSF Pa rki ng Rent, PSF Storage
NNN = Tenant is billed directly for, or reimburses ALL
Plus Operating & Ma i ntenance Expens es , PSF Pl us Rea l Estate Taxes , PSF Pl us El
XYZ Company 7/30/2017 operating and RE taxes and electric in full, starting in Base
Year. These dollar amounts will show up in the Service Charge $70.00
123 Main Street, Suite 2100, New York, NY 10001 line item.
$60.00
Gross = Tenant reimburses all operating and RE taxes, but
Basic Lease Terms: NO electric, for all amounts in EXCESS OF Base Year amount
$50.00
Lease Rentable Area 5,000 SF (thus in Base Year there are no reimbursements from tenant).
$40.00
Lease Term (multiples of 12 months only; maximum of 120 ### 48 months These dollar amounts will show up in the Service Charge line
item. $30.00
Parking per 1,000 RSF & Total ### 10.00 spots
$20.00
Full Service = Tenant reimburses all operating and RE taxes
Initial Monthly Parking Rent per Spot $125.00
AND electric, for all amounts in EXCESS OF Base Year
Lease Type Full Service $10.00
amount (thus in Base Year there are no reimbursements from
Free Rent ### 13 months tenant). These dollar amounts will show up in the Service $0.00
Charge line item.
Tenant Improvement Allowance $50,000 $10.00 PSF Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Other Landlord Concession $5,000 $1.00 PSF
Free Rent Calendar
Initial Project Costs (TI, FF&E, IT, A&E) $75,000 $15.00 PSF Free Rent At Beginning of Year 13 months 1 months 0 months 0 months 0 months
Free Rent At End of Year 1 months 0 months 0 months 0 months 0 months

Initial & Average Rental Rates: Annual Average Projection

Initial Year scalationAnnual Rate Year 1 Year 2 Year 3 Year 4 Year 5
Base Rent, PSF ($57.00) 2.00% ($58.73) Base Rent, PSF (57.00) (58.14) (59.30) (60.49) 0.00
Parking Rent, PSF ($3.00) 2.00% ($3.09) Parking Rent, PSF (3.00) (3.06) (3.12) (3.18) 0.00
Storage Rent, PSF $0.00 0.00% $0.00 Storage Rent, PSF 0.00 0.00 0.00 0.00 0.00

Percentage Rent, PSF 3.00% ($0.09) ($0.12) Percentage Rent, PSF (0.09) (0.11) (0.13) (0.15) 0.00
Total Rent LL Base Year ($60.09) Total Rent (60.09) (61.31) (62.55) (63.82) 0.00
Plus Operating & Maintenance Expenses
$10.00 $0.00 3.00% ($0.46) Plus Operating & Maintenance Expenses, PSF 0.00 (0.30) (0.61) (0.93) 0.00
Plus Real Estate Taxes, PSF $5.00 $0.00 2.00% ($0.15) Plus Real Estate Taxes, PSF 0.00 (0.10) (0.20) (0.31) 0.00
Plus Electricity, PSF $3.00 $0.00 3.00% ($0.14) Plus Electricity, PSF 0.00 (0.09) (0.18) (0.28) 0.00
Annual Occupancy Costs PSF ### ### Annual Occupancy Costs PSF ($60.09) ($61.80) ($63.55) ($65.34) $0.00
Annual Occupancy Costs ($300,450) ($313,468) Annual Occupancy Costs ### ### ### ### $0
Average Monthly Occupancy Cost ($25,038) ($26,122) Average Monthly Occupancy Cost ($25,038) ($25,750) ($26,478) ($27,223) $0

Average
Other Cash Impacts: Value Base Year Annual Rate Other Cash Impacts:
Free Rent 13 months $57.00 $15.46 Free Rent 57.00 4.85 0.00 0.00 0.00
Tenant Improvement Allowance $50,000 $10.00 $2.50 Tenant Improvement Allowance 10.00
Project Costs $75,000 ($15.00) ($3.75) Project Cost (15.00)
Other Landlord Concession $1.00 $0.25 Other Landlord Concessions 1.00
Net Effective Rent with Percentage Rent ($7.09) PSF ### Net Cash Flow PSF ($7.09) ($56.95) ($63.55) ($65.34) $0.00
without Percentage Rent ### vs. to Landlord ($25.91) $38.46 $44.55 $45.82 $0.00
Difference ($33.00) ($18.49) ($18.99) ($19.51) $0.00
Total Net Cash Flow ($964,646)
NPV Net Cash Flow 10.00% ($729,429) Total Annual Net Cash Flow ($35,450) ### ### ### $0
Initial Tenant Capital Requirement ($25,000)

Percentage Rent Calculation Growth Year 1 Year 2 Year 3 Year 4 Year 5

Gross Sales 3.00% $300,000 $309,000 $318,270 $327,818 $0
Breakpoint Sales Amount $285,000 $290,700 $296,514 $302,444 $0