You are considering an investment in a 250,000 sqft office building. Market rent in this area is currently $25/sqft and is expected to increase at a rate of 5% annually into the foreseeable future. Comparable buildings in this area have a 6% vacancy rate. Expenses are currently $13/sqft and have been increasing by $1/sqft annually. Typically half of the operating expenses are recovered from tenants. When getting into a project of this type you generally consider a 5-year holding period and look for a 12% rate of return.

Create the pro forma cash flow statement for this investment.