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The answer for the Leasing Commission that was correct was like $40,000 or something, but I got $22,838. The formula I used was as follows:
(Net Rentable Area * Market Rent * New Leasing Commission * (1 – Renewal Probability)) + (Net Rentable Area * Market Rent * Renewal Leasing Commission * Renewal Probability)
What am I doing wrong?
Hi Peter,
I’m guessing you’re referring to question 1 on the quiz: “Using the materials provided and the method taught in lecture 1.5, approximately what is the annual leasing cost reserve for this industrial property?”
So you’re correct in how to calculate leasing commission, but you’re missing the other half of the leasing cost element: tenant improvements.
Let me know if I’m looking at the wrong quiz question.
Spencer
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