Assumptions and initial informationTreat all capex reserves and outlays above the line. Treat all ground lease payments below the line. Assume any ground lease payment is tax deductible.Holding period and spaceHolding period = 5 yearsSpace size = 100,000 square feetDiscount rates and cap rates The expected going-in cap rate is 8%. Expected exit cap rates depend on the prevailing average cap rate in your market at the end of Year 5 (which depends on whether we are looking at the Base or Downside case), and on whether you decide to renovate or not. See below. The required going-in IRR is 15%. Your required going-in IRR does not depend on which macro scenario is realized. Rents Year 1 gross rent per square foot = $55 Year 1 concessions = 1 month of free rent There are no concessions in Years 2-5 Gross rent grows each year as a function of inflation, which depends on whether we are looking at the Base or Downside case, and on whether you decide to renovate or not. See below.Expenses and reserves Operating expenses are $500,000 in Year 1. They grow at the rate of inflation each year thereafter.o The lease has a net structure with expense stops. Expense stops are given in the template per square foot. Total operating expenses in excess of the expense stop are reimbursedeach year.o All reimbursable expenses should be included in PGI. Capex reserves are $245,000 in Year 1. The reserves grow at the rate of inflation each year thereafter. Capex outlays only occur if a renovation is undertaken.Management fees are always 5% of PGI. Management fees are paid out of EGI.Depreciation: The depreciable basis is equal to $30,000,000. Depreciation deductions are calculated over a 39-year period (straight line). Assume there is no depreciation recapture tax.Tax rates and broker fees Annual BTCF is taxed at your yearly ordinary tax rate, which is 35%.