The Student Room Group

real estate

Question 1 of 65
You own a 6,000 sf office building that is fully occupied except for one 1,000 sf suite. You recently signed a 5 year lease for this suite. The lease is for $12 PSF but you have to provide the tenant with $5 PSF of tenant improvements and 6 months free rent. You also owe the leasing broker a 5.0% commission. With the new lease in place, you expect the property to produce $100,000 of NOI next year after accounting for the free rent. Someone has offered to buy the property from you for a 5.0% cap rate and the potential buyer believes that the sale price should be $2,000,000.

What is the dollar amount of Leasing Commissions due?


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