Using the lease analysis template, please analyze the following proposals for the same 10,000 sf space in your building. Both leases are assumed to start July 1, 2018 and 2018 expenses are assumed to be $9.27 per square foot. Operating expenses are assumed to increase 3% per year. Also assume for each a $3 psf moving allowance and market commissions of $1.00 psf per year for the outside broker and $0.50 psf for the inside broker. Please use an 8% discount rate. a. Tenant A is willing to pay $32 psf FSG for a 5 year term. The deal includes 3 months of free rent, 3% annual bumps and a $35 psf tenant improvement allowance. They will have 3 parking spaces per 1,000 sf and will pay $150 per stall per month, increasing at 3%. b. Tenant B needs more buildout but is willing to pay a higher rent. Their rent is $34 psf FSG but they have a $50 TI allowance. They also have a 5 year term but a $1.00 psf per year rent increase. They also have 3 months free rent. They only need 2.5 stalls per 1,000 sf and will pay $150 per stall per month, increasing at 3% per year. Assuming your owner is a long term owner, which is the preferred deal? If you know the owner is likely to sell in 2020, does that change your answer? Why? Assume that you would sell at a 7% cap rate. For purposes of analysis, assume sale in year 2.