Agenda RE Calculations 101 Determining PRS/Bldg Denominator Monthly Rent CAM/RET Estimates Gross Ups CAM/RET Reconciliations Caps – Controllable/Uncontrollable Net Operating Income

RE Calculations 101 Lease Types NET Lease Rental Rate $12.00, plus CAM/INS $6.31, & RET $2.80 Gross Lease One Rate $21.00 PSF Modified Gross – includes a Base Year for CAM or RET

Determining PRS/Bldg Denominator RE Calculations 101 Determining PRS/Bldg Denominator PRS = Size Suite/Bldg Rentable SF Building Denominator = Total Building RSF PRS can change if building is remeasured Useable SF Loss Factor

Determining Monthly Rent/CAM/RET RE Calculations 101 Determining Monthly Rent/CAM/RET PSF rate is determined by quoted market rate (negotiated directly in the lease) PSF x Size Suite / 12 = Monthly Rental Rate % Increase CPI Increase Budgeted CAM/TAX For building (PSF x denominator)

RE Calculations 101 Determine PRS for your suite What is the Annual Budgeted CAM & TAX Expenses?

RE Calculations 101

Determine CAM & TAX monthly estimates for your suite RE Calculations 101 Determine CAM & TAX monthly estimates for your suite

RE Calculations 101

Gross Ups RE Calculations 101 Costs that vary with occupancy are grossed up Usually only in Office Leases Normally see 100% or 95% Gross Up Allowance

Gross Ups RE Calculations 101 Expenses that are normally grossed up: Janitorial Contract Cleaning Supplies Water (possible other utilities i.e. electric) Trash Management Fees

RE Calculations 101

RE Calculations 101

RE Calculations 101

RE Calculations 101

RE Calculations 101

CAM & RET Reconciliations RE Calculations 101 CAM & RET Reconciliations CAM means Common Area Maintenance (any expense for the common good of all tenants is considered a CAM expense) Total CAM Cost to run Building $535,650 Divided by Size Bldg (91,844 sf) = $5.83PSF At Year End actual costs are determined then a reconciliation must be completed no later than 3/31

Determine CAM & TAX Year End Costs for your suite RE Calculations 101 Determine CAM & TAX Year End Costs for your suite

RE Calculations 101

RE Calculations 101 Fill out 2016 CAM & TAX Escrows Billed to Tenant for your suite

RE Calculations 101

What is the 2016 CAM & TAX Reconciliation Amount Due RE Calculations 101 What is the 2016 CAM & TAX Reconciliation Amount Due

RE Calculations 101

RE Calculations 101 CAM CAPS A CAP is a stated maximum amount that LL can charge a tenant for CAM and/or RET (usually a percentage over previous year’s CAM expense) Controllable/ Uncontrollable Expenses CAP usually excludes uncontrollable expenses (snow removal, insurance, utility expenses or others expenses defined in the lease)

RE Calculations 101 Net Operating Income

RE Calculations 101 Questions?