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Unformatted text preview: Mu ”‘W Quiz ’ WW" WV "333” ' WW ”I! or arm an (aw/(6+ €\0\\\ 2b\/L Finance 4510 Quiz 3 Complete answer sheet on third page and submit answer sheet in class on October 1 1 m 2012. This is not a group exercise and each student is expected to complete this quiz without any assistance other than lecture notes and case studies. R 1. In which type of lease is it most likely that a proportionate share of expenses shall be recaptured by the Landlord from the Tenant as total building expenses increase each year, above the first year or base year of the lease term? a. Triple Net Lease (l) Full Service Lease c. Gross Lease d. Net Lease 2. With respect to the treatment of capital expenditures, which of the following statements is true? a. Capital Expenses can never be included in the annual collection of operating expenses. b. Capital Expenses may be allowed by the leases however, the amount included in the annual operating expenses cannot exceed that years savings directly resulting from said capital expenditure. c. Capital expenses can be included assuming they"do not exceed $5,000. ® None of the above. 3. True or False: The Gross up Process is used specifically and solely to maximize the revenues of the Landlord. Questions 4- - 7 related to information provided Consider the following expenses deemed to be total unadjusted building expenses for calendar year 2009: Gross Rentable Area in Building 200,000 sf — Total Controllable 1-00 0.00% 100-00% 0.75 0.50 2.00 1.75 100% m Finance 4510 Quiz 3 4. Assuming the building had an average occupancy rate of 90% for 2009, and leases that require building expenses to be adjusted to 95% of occupancy each year, which of the following represents the best estimate of variable expenses? a. $2.00 b. $2.25 c. $2.75 (9 $2.50 5. Assuming a tenant had negotiated a 5% cap on controllable expense increases, what amount per square foot total above would be subject to the annual cap? a. $6.00 (B) $4.00 c. $3.00 (1. $2.50 6. Assume the expenses above represent the total adjusted expenses for calendar year 2009 and the building was fully occupied. If a tenant has a $5.95 expense stop and occupies 8% of the building, what is the total amount of increase in operating expenses due to the Landlord for 2009 on a per square foot basis? a. $6.00 b. $0.48 (g $0.05 . $0.45 7. Assume the expenses above represent the total adjusted expenses for calendar year 2009 and the building was fully occupied Assume the Landlord anticipates a 3% increase to all expenses in 2010 with the exception of Real Estate Taxes and Insurance which is anticipated to remain unchanged from 2009. Assuming the Landlord collects an additional rent amount each month in 2010 representing 1/12 of the anticipated annual amount due, how much per month will be charged to a tenant with a $6.00 expense stop and a pro rata share of 4.5%? J? 75-03 Finance 4510 Quiz 3 8. Iones, Inc. occupies 12% of Cornerstone Office Building and has a base year of 2007. 2007 total expenses as adjusted equaled $1,500,000. If 2009 total expenses as adjusted equaled $1,750,000, what would be jones, Inc.’s proportionate share of the increases in operating expenses due to the Landlord for 2009? f 3 °/ 000 9. Bob’s Sandwich Shop has a triple net lease with 2,000 square feet in Cornerstone Retail Center which consists of 30,000 square feet [GLA]. The Landlord projects the following estimates for Calendar Year 2010: CAM— $105,000; Taxes-$85,000; and Insurance-$35,000. Assuming the Landlord may collect 1 / 12 of the anticipated year end liability each month as an estimate for all reimbursable costs, what amount would be due to the Landlord each man as the tenant's CAM estimate? 5%}— 33 10. A tenant takes occupancy in a retail center on Iuly 1, 2009 with a triple net lease. The total CAM expenditures are as follows: 2007 4.25 psf 2008 4.45 psf 2009 4.50 psf (estimated) What amount per square foot will be used as the tenant'sexpens’e stop for calculating the tenant’s share of CAM? 71mg WWW 72%” 594%“ ”by” mat M 1‘an M/v My; Finance 4-510 Quiz 3 Answer Sheet Must be submitted in Class on W! Name: Thursday October 11 ...
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