Notice to Vacate or Renew from Landlord by vsg17215

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More Info
									                                                                                 XYZ
                                                               Comparison of Aggregate Occupancy Costs
             $9.00

                                                                                                   10-Year Total
                                                                                                   10-Year NPV @ 8.5%



             $8.00
                                     $7.79




                                                                                                                                    $7.13

             $7.00
(Millions)




                                                                                                        $6.17

             $6.00




                                                       $5.09
             $5.00
                                                                                                                                                 $4.70




                                                                                                                     $3.98
             $4.00




             $3.00
                              Renew Upon Lease Expiration                                               Restructure in 2001   Relocate Upon Lease Expiration


             Page 1   Prepared by Julien J. Studley, Inc. 5/5/2011   (e64286fd-8c2f-4510-8c36-18972022c84b.xls/T)
                                                                        XYZ
                                                        Comparison of Annual Occupancy Costs
 $900,000




 $800,000




 $700,000




 $600,000




 $500,000

                                                                                                              Renew Upon Lease Expiration: Landlord's View

                                                                                                              Restructure in 2001

                                                                                                              Relocate Upon Lease Expiration

 $400,000
            2001             2002               2003                  2004                  2005       2006         2007            2008           2009      2010

Page 2   Prepared by Julien J. Studley, Inc. 5/5/2011   (e64286fd-8c2f-4510-8c36-18972022c84b.xls/A)
 XYZ CORPORATION
  0



                SUMMARY OF ALTERNATIVES:
                ANNUAL OCCUPANCY COSTS



                                  (BASELINE FOR COMPARISON)                                         RESTRUCTURE                           RELOCATE UPON
                                         RENEW UPON                                                  LEASE IN 2001                       LEASE EXPIRATION
                                     LEASE EXPIRATION AT                                                                               TO CLASS A SPACE AT
                                      CURRENT LOCATION                                                                                  NEW SPEC BUILDING

         Lease Year                             Annual           Aggregate                                 Annual    Aggregate                Annual      Aggregate
                                              Occupancy            Annual                             Occupancy        Annual                Occupancy     Annual
      Dec.            Nov.      Square           Cost           Occupancy               Square             Cost      Occupancy     Square      Cost      Occupancy
 LY   1st       -     30th      Footage          P.S.F.           Cost                  Footage            P.S.F.      Cost        Footage     P.S.F.      Cost

 1    2001      -     2002       33,000         $24.19           $798,165                33,000            $17.01     $561,297     33,000     $24.19      $798,165
 2    2002      -     2003       33,000         $24.43           $806,252                33,000            $17.24     $568,808     33,000     $24.43      $806,252
 3    2003      -     2004       33,000         $22.10           $729,260                33,000            $17.49     $577,097     31,000     $20.91      $648,055
 4    2004      -     2005       33,000         $22.34           $737,271                33,000            $17.75     $585,635     31,000     $21.16      $656,046
 5    2005      -     2006       33,000         $22.61           $746,107                33,000            $18.01     $594,429     31,000     $21.45      $664,869
 6    2006      -     2007       33,000         $22.89           $755,209                33,000            $19.29     $636,486     31,000     $21.74      $673,957
 7    2007      -     2008       33,000         $23.17           $764,584                33,000            $19.57     $645,815     31,000     $22.04      $683,318
 8    2008      -     2009       33,000         $24.46           $807,241                33,000            $19.86     $655,424     31,000     $23.35      $723,960
 9    2009      -     2010       33,000         $24.76           $817,186                33,000            $20.16     $665,322     31,000     $23.67      $733,890
 10   2010      -     2011       33,000         $25.07           $827,431                33,000            $20.47     $675,516     31,000     $24.00      $744,119

             2 YEAR TOTAL (2001 - 2002):                       $1,604,416                                           $1,130,106                           $1,604,416
      Differential Compared to Baseline:                          (n/a)                                             ($474,310)                               $0

         2 YEAR NPV @ 8.5% (2001-2002):                        $1,420,510                                           $1,000,502                           $1,420,510
      Differential Compared to Baseline:                          (n/a)                                             ($420,008)                               $0

           10 YEAR TOTAL (2001 - 2010):                        $7,788,706                                           $6,165,830                           $7,132,631
      Differential Compared to Baseline:                          (n/a)                                             ($1,622,876)                         ($656,075)

      10 YEAR NPV @ 8.5% (2001-2010):                          $5,092,898                                           $3,984,491                           $4,700,791
      Differential Compared to Baseline:                          (n/a)                                             ($1,108,406)                         ($392,107)




Page 3       Prepared by Julien J. Studley, Inc. 5/5/2011   (e64286fd-8c2f-4510-8c36-18972022c84b.xls/S)
XYZ CORPORATION




                         RENEW UPON
                      LEASE EXPIRATION AT
                       CURRENT LOCATION


            (1)                    (2)         (3)           (4)              (5)        (6)            (7)              (8)       (9)         (10)        (11)         (12)       (13)        (14)             (15)      (16)

                                                                                                                                      Tenant Construction Costs
        Lease Year                           Full         Operating                                                                                     Amortized    Amortized                             Annual      Aggregate
                                 Square     Service        Expense                    Annual       Aggregate             TI     Landlord    Net Cash    Net Cash     Aggregate                Square      Occupancy     Annual
          Dec.        Nov.       Footage    Rental        & R.E. Tax       Electric    Rent         Annual             Cost     Allowance    Shortfall   Shortfall   Net Cash     Parking    Footage        Cost       Occupancy
  LY      1st     -   30th       Leased      Rate         Passthrus         Cost      P.S.F.         Rent              P.S.F.     P.S.F.      P.S.F.      P.S.F.      Shortfall    Cost      Occupied       P.S.F.       Cost

   4      2001    -   2002       33,000     $18.00          $1.68           $1.49     $21.17        $698,565                                                                      $99,600     33,000        $24.19      $798,165
   5      2002    -   2003       33,000     $18.00          $1.88           $1.53     $21.41        $706,652                                                                      $99,600     33,000        $24.43      $806,252
   1      2003    -   2004       33,000     $17.50          $0.00           $1.58     $19.08        $629,660           $5.00     ($5.00)      $0.00       $0.00         $0        $99,600     33,000        $22.10      $729,260
   2      2004    -   2005       33,000     $17.50          $0.20           $1.63     $19.32        $637,671                                              $0.00         $0        $99,600     33,000        $22.34      $737,271
   3      2005    -   2006       33,000     $17.50          $0.41           $1.68     $19.59        $646,507                                              $0.00         $0        $99,600     33,000        $22.61      $746,107
   4      2006    -   2007       33,000     $17.50          $0.64           $1.73     $19.87        $655,609                                              $0.00         $0        $99,600     33,000        $22.89      $755,209
   5      2007    -   2008       33,000     $17.50          $0.87           $1.78     $20.15        $664,984                                              $0.00         $0        $99,600     33,000        $23.17      $764,584
   6      2008    -   2009       33,000     $18.50          $1.11           $1.83     $21.44        $707,641                                              $0.00         $0        $99,600     33,000        $24.46      $807,241
   7      2009    -   2010       33,000     $18.50          $1.36           $1.89     $21.75        $717,586                                              $0.00         $0        $99,600     33,000        $24.76      $817,186
   8      2010    -   2011       33,000     $18.50          $1.61           $1.94     $22.06        $727,831                                              $0.00         $0        $99,600     33,000        $25.07      $827,431
   9      2011    -   2012       33,000     $18.50          $1.87           $2.00     $22.38        $738,382                                              $0.00         $0        $99,600     33,000        $25.39      $837,982
  10      2012    -   2013       33,000     $18.50          $2.14           $2.06     $22.70        $749,251                                              $0.00         $0        $99,600     33,000        $25.72      $848,851

(Footnotes to this analysis are on the following page.)                                                                                                                                     LY 2001 - LY 2002
                                                                                                                                                                                            2 YEAR TOTAL:              $1,604,416

                                                                                                                                                                                            2 YEAR NPV @ 8.5%:         $1,420,510

                                                                                                                                                                                            LY 2001 - LY 2010
                                                                                                                                                                                            10 YEAR TOTAL:             $7,788,706

                                                                                                                                                                                            10 YEAR NPV @ 8.5%:        $5,092,898

                                                                                                                                                                                            LY 2001 - LY 2012
                                                                                                                                                                                            12 YEAR TOTAL:             $9,475,539

                                                                                                                                                                                            12 YEAR NPV @ 8.5%:        $5,753,404




        Page 4        Prepared by Julien J. Studley, Inc. 5/5/2011     (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Renew LL)
XYZ CORPORATION




                           RENEW UPON
                        LEASE EXPIRATION AT
                         CURRENT LOCATION


Footnotes:
         **The period 12/1/2001 - 11/30/2003 represents the Tenant's existing lease obligation (see separate analysis).**
    (1) The lease year runs from December 1st of the year to November 30th of the following year.
    (2) The square footage leased by the Tenant.
    (3) The base rental rate is quoted on a full-service basis, including a base year index for operating expenses and real estate taxes.
         After the Tenant renews, the full service rate escalates by $1.00 p.s.f. on the sixth anniversary of the lease commencement.
    (4) The Tenant pays its proportionate share of operating expense and real estate tax passthroughs above a 2004 base year estimated to be $7.10 p.s.f.
         Operating expenses and real estate taxes are assumed to increase by 100% of CPI (3.0%) per annum.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
    (5) The Tenant pays its proportionate share of electric costs, estimated to be $1.45 p.s.f. in 2001.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
    (6) The annual rent per square foot (sum of columns 3, 4, & 5).
    (7) The aggregate annual rent (column 6 multiplied by column 2).
    (8) It is assumed that the Tenant will spend $5.00 p.s.f. for tenant improvement costs.
    (9) The Landlord provides an allowance of $5.00 p.s.f. for tenant improvement costs.
   (10) The per square foot net shortfall in cash, if any, required for tenant improvements (sum of columns 8 & 9).
   (11) The per square foot net cash shortfall in column 10, if any, is amortized over the lease term at an interest rate of 9% per annum.
   (12) Column 11 represented on an aggregate basis.
   (13) In 2001, the Tenant pays for 24 unreserved spaces at $200 per space per month and 10 reserved spaces at $350 per space per month.
   (14) The square footage occupied by the Tenant.
   (15) The annual occupancy cost per square foot (column 16 divided by column 14).
   (16) The aggregate annual occupancy cost (sum of columns 7, 12, & 13).

Disclaimer:
         All information furnished regarding property for sale, rental, or financing is from sources deemed reliable. No express representation can be made, nor is any to be implied,
         as to the accuracy thereof and is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, leasing or financing, or withdrawal, without notice.
         The sale of a property will probably result in an increase in real estate taxes. Projections, if any, as to the rate of inflation, real estate taxes, operating expenses, and other variables
         are necessarily estimates only. No warranties or representations can be made as to the conditions of the property or any hazards contained therein nor are any to be implied.




         Page 5         Prepared by Julien J. Studley, Inc. 5/5/2011        (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Renew LL)
XYZ CORPORATION                                                                                                                  Landlord's Releasing Costs in 2001
                                                                                                 P.S.F.
                                                                                                $19.87      14 Months Marketing & Construction Downtime
                                                                                                $25.00      Construction Allowance to New Tenants
                                                                                                $44.87      Subtotal: Landlord Costs if Tenant Vacates Space
                        RESTRUCTURE                                                             $34.95      Net Present Value @ 8.5% Of Landlord Cost if Tenant Vacates
                         LEASE IN 2001                                                          ($5.00) $5 Allowance to Renewing Tenant
                                                                                                $29.95 2001 Value of Landlord's Cost to Release the Space


            (1)                     (2)           (3)             (4)             (5)              (6)             (7)         (8)           (9)           (10)        (11)       (12)        (13)           (14)

                                               Existing        Market                                                                                                                        Total       Restructured
        Lease Year                              Lease        Transaction                                                  Amortization   Restructured   Operating                         Restructured    Aggregate
                                 Square       Obligation        Today                                        Amortization      of        Full Service    Expense                           Occupancy       Annual
          Dec.        Nov.       Footage       FS Rent         FS Rent         Annual            Market            of      Releasing        Rental      & R.E. Tax   Electric   Parking      Cost         Occupancy
  LY      1st     -   30th       Leased      & Passthrus     & Passthrus      Difference          Rent        Difference    Costs            Rate       Passthrus     Cost       Cost        P.S.F.         Cost

  1       2001    -   2002       33,000        $21.17           $17.00          $4.17           $17.00           $1.11       ($4.46)       $13.65         $0.00      $1.45       $1.91      $17.01        $561,297
  2       2002    -   2003       33,000        $21.41           $17.18          $4.23           $17.00           $1.11       ($4.46)       $13.65         $0.18      $1.49       $1.91      $17.24        $568,808
  3       2003    -   2004       33,000                                                         $17.00           $1.11       ($4.46)       $13.65         $0.39      $1.54       $1.91      $17.49        $577,097
  4       2004    -   2005       33,000                                                         $17.00           $1.11       ($4.46)       $13.65         $0.60      $1.58       $1.91      $17.75        $585,635
  5       2005    -   2006       33,000                                                         $17.00           $1.11       ($4.46)       $13.65         $0.82      $1.63       $1.91      $18.01        $594,429
  6       2006    -   2007       33,000                                                         $18.00           $1.11       ($4.46)       $14.65         $1.05      $1.68       $1.91      $19.29        $636,486
  7       2007    -   2008       33,000                                                         $18.00           $1.11       ($4.46)       $14.65         $1.28      $1.73       $1.91      $19.57        $645,815
  8       2008    -   2009       33,000                                                         $18.00           $1.11       ($4.46)       $14.65         $1.52      $1.78       $1.91      $19.86        $655,424
  9       2009    -   2010       33,000                                                         $18.00           $1.11       ($4.46)       $14.65         $1.77      $1.84       $1.91      $20.16        $665,322
  10      2010    -   2011       33,000                                                         $18.00           $1.11       ($4.46)       $14.65         $2.02      $1.89       $1.91      $20.47        $675,516

                                                          Total Difference:     $8.40                                                                                           LY 2001 - LY 2002
                                              NPV of Difference at 8.5%:        $7.43                                                                                           2 YEAR TOTAL:            $1,130,106

(Footnotes to this analysis are on the following page.)                                                                                                                         2 YEAR NPV @ 8.5%:       $1,000,502

                                                                                                                                                                                LY 2001 - LY 2010
                                                                                                                                                                                10 YEAR TOTAL:           $6,165,830

                                                                                                                                                                                10 YEAR NPV @ 8.5%: $3,984,491




        Page 6        Prepared by Julien J. Studley, Inc. 5/5/2011   (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Restr)
XYZ CORPORATION                                                                                                                             Landlord's Releasing Costs in 2001
                                                                                                       P.S.F.
                                                                                                      $19.87      14 Months Marketing & Construction Downtime
                                                                                                      $25.00      Construction Allowance to New Tenants
                                                                                                      $44.87      Subtotal: Landlord Costs if Tenant Vacates Space
                          RESTRUCTURE                                                                 $34.95      Net Present Value @ 8.5% Of Landlord Cost if Tenant Vacates
                           LEASE IN 2001                                                              ($5.00) $5 Allowance to Renewing Tenant
                                                                                                      $29.95 2001 Value of Landlord's Cost to Release the Space


Footnotes:
     (1) The lease year runs from December 1st of the year to November 30th of the following year.
     (2) The square footage leased by the Tenant.
     (3) Represents the full service rent plus passthroughs for the existing lease.
     (4) Represents the full service rent plus passthroughs for a market deal in the building.
     (5) Represents the difference between a market deal and the Tenant's existing lease obligation.
     (6) Represents the market rental rate paid in the building.
     (7) The net present value of this difference is amortized over the lease term at an interest rate of 8.5% per annum.
     (8) Should the Tenant vacate the space in 2003, the Landlord will experience significant downtime, construction, and additional TI costs.
         The PV of this cost is amortized as a credit to the transaction.
     (9) Represents the restructured annual rent per square foot (sum of columns 6, 7, & 8).
   (10) The Tenant pays its proportionate share of operating expense and real estate tax passthroughs above a 2002 base year index estimated to be $6.70 p.s.f.
         Operating expenses and real estate taxes are assumed to increase by 100% of CPI (3.0%) per annum.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
   (11) The Tenant pays its proportionate share of electric costs, estimated to be $1.45 p.s.f. in 2001.
   (12) In 2001, the Tenant pays for 24 unreserved spaces at $125 per space per month and 10 reserved spaces at $225 per space per month.
   (13) The Tenant pays its proportionate share of electric costs, estimated to be $1.45 p.s.f. in 2001.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
   (14) The total restructured occupancy per square foot (sum of columns 9, 10, 11, & 12).
   (15) The aggregate annual occupancy cost (column 13 multiplied by column 2).


Disclaimer:
         All information furnished regarding property for sale, rental, or financing is from sources deemed reliable. No express representation can be made, nor is any to be implied,
         as to the accuracy thereof and is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, leasing or financing, or withdrawal, without notice.
         The sale of a property will probably result in an increase in real estate taxes. Projections, if any, as to the rate of inflation, real estate taxes, operating expenses, and other variables
         are necessarily estimates only. No warranties or representations can be made as to the conditions of the property or any hazards contained therein nor are any to be implied.




         Page 7         Prepared by Julien J. Studley, Inc. 5/5/2011       (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Restr)
XYZ CORPORATION
    0



                        RELOCATE UPON
                       LEASE EXPIRATION
                      TO CLASS A SPACE AT
                       NEW SPEC BUILDING


            (1)                    (2)         (3)           (4)              (5)        (6)            (7)                 (8)       (9)            (10)        (11)         (12)        (13)       (14)             (15)      (16)

                                                                                                                                            Tenant Construction Costs
        Lease Year                           Full         Operating                                                                                           Amortized    Amortized                             Annual      Aggregate
                                Square      Service        Expense                    Annual        Aggregate               TI     Landlord       Net Cash    Net Cash     Aggregate                Square      Occupancy     Annual
          Dec.        Nov.      Footage     Rental        & R.E. Tax      Electric     Rent          Annual               Cost     Allowance       Shortfall   Shortfall   Net Cash     Parking    Footage        Cost       Occupancy
  LY      1st     -   30th      Leased       Rate         Passthrus        Cost       P.S.F.          Rent                P.S.F.     P.S.F.         P.S.F.      P.S.F.      Shortfall    Cost      Occupied       P.S.F.       Cost

   4      2001    -   2002       33,000     $18.00          $1.68          $1.49      $21.17        $698,565                                                                            $99,600     33,000        $24.19      $798,165
   5      2002    -   2003       33,000     $18.00          $1.88          $1.53      $21.41        $706,652                                                                            $99,600     33,000        $24.43      $806,252
   1      2003    -   2004       31,000     $17.00          $0.00          $1.58      $18.58        $575,999              $25.00    ($25.00)        $0.00       $0.00         $0        $72,056     31,000        $20.91      $648,055
   2      2004    -   2005       31,000     $17.00          $0.21          $1.63      $18.84        $583,990                                                    $0.00         $0        $72,056     31,000        $21.16      $656,046
   3      2005    -   2006       31,000     $17.00          $0.45          $1.68      $19.12        $592,813                                                    $0.00         $0        $72,056     31,000        $21.45      $664,869
   4      2006    -   2007       31,000     $17.00          $0.69          $1.73      $19.42        $601,901                                                    $0.00         $0        $72,056     31,000        $21.74      $673,957
   5      2007    -   2008       31,000     $17.00          $0.94          $1.78      $19.72        $611,262                                                    $0.00         $0        $72,056     31,000        $22.04      $683,318
   6      2008    -   2009       31,000     $18.00          $1.20          $1.83      $21.03        $651,903                                                    $0.00         $0        $72,056     31,000        $23.35      $723,960
   7      2009    -   2010       31,000     $18.00          $1.46          $1.89      $21.35        $661,834                                                    $0.00         $0        $72,056     31,000        $23.67      $733,890
   8      2010    -   2011       31,000     $18.00          $1.74          $1.94      $21.68        $672,063                                                    $0.00         $0        $72,056     31,000        $24.00      $744,119
   9      2011    -   2012       31,000     $18.00          $2.02          $2.00      $22.02        $682,598                                                    $0.00         $0        $72,056     31,000        $24.34      $754,655
  10      2012    -   2013       31,000     $18.00          $2.31          $2.06      $22.37        $693,450                                                    $0.00         $0        $72,056     31,000        $24.69      $765,506

                                                                                                                                                                                                  LY 2001 - LY 2002
                                                                                                                                                                                                  2 YEAR TOTAL:              $1,604,416

(Footnotes to this analysis are on the following page.)                                                                                                                                           2 YEAR NPV @ 8.5%:         $1,420,510

                                                                                                                                                                                                  LY 2001 - LY 2010
                                                                                                                                                                                                  10 YEAR TOTAL:             $7,132,631

                                                                                                                                                                                                  10 YEAR NPV @ 8.5%:        $4,700,791




        Page 8        Prepared by Julien J. Studley, Inc. 5/5/2011     (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Reloc)
XYZ CORPORATION
    0



                          RELOCATE UPON
                         LEASE EXPIRATION
                        TO CLASS A SPACE AT
                         NEW SPEC BUILDING


Footnotes:
         **The period 10/1/2001 - 9/30/2004 represents the Tenant's existing lease obligation (see separate analysis).**
    (1) The lease year runs from December 1st of the year to November 30th of the following year.
    (2) The square footage leased by the Tenant. The Tenant achieves an efficiency gain by relocating.
    (3) The base rental rate is quoted on a full-service basis, including a base year index for operating expenses and real estate taxes.
    (4) The Tenant pays its proportionate share of operating expense and real estate tax passthroughs above a 2004 base year estimated to be $7.65 p.s.f.
         Operating expenses and real estate taxes are assumed to increase by 100% of CPI (3.0%) per annum.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
    (5) The Tenant pays its proportionate share of electric costs, estimated to be $1.45 p.s.f. in 2001.
    (6) The annual rent per square foot (sum of columns 3, 4, & 5).
    (7) The aggregate annual rent (column 6 multiplied by column 2).
    (8) It is assumed that the Tenant will spend $25.00 p.s.f. for tenant improvement costs.
    (9) The Landlord provides $25.00 p.s.f. for tenant improvement costs.
   (10) The per square foot net shortfall in cash, if any, required for tenant improvements (sum of columns 7 & 8).
   (11) The per square foot net cash shortfall in column 10, if any, is amortized over the lease term at an interest rate of 9% per annum.
   (12) Column 11 represented on an aggregate basis.
   (13) In 2003, the Tenant pays for 24 unreserved spaces, estimated at $140 per space per month in 2001 and 10 reserved spaces, estimated at $230 per space per month in 2001,
         Parking costs are assumed to increase by 100% of CPI (3.0%) per annum.
   (14) The square footage occupied by the Tenant.
   (15) The annual occupancy cost per square foot (column 16 divided by column 14).
   (16) The aggregate annual occupancy cost (sum of columns 6, 12, & 13).

Disclaimer:
         All information furnished regarding property for sale, rental, or financing is from sources deemed reliable. No express representation can be made, nor is any to be implied,
         as to the accuracy thereof and is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, leasing or financing, or withdrawal, without notice.
         The sale of a property will probably result in an increase in real estate taxes. Projections, if any, as to the rate of inflation, real estate taxes, operating expenses, and other variables
         are necessarily estimates only. No warranties or representations can be made as to the conditions of the property or any hazards contained therein nor are any to be implied.




         Page 9         Prepared by Julien J. Studley, Inc. 5/5/2011        (e64286fd-8c2f-4510-8c36-18972022c84b.xls/Reloc)
XYZ CORPORATION
    0



                  EXISTING LEASE OBLIGATION


            (1)                    (2)        (3)            (4)            (5)         (6)           (7)                (8)        (9)         (10)        (11)         (12)        (13)       (14)             (15)      (16)

                                                                                                                                       Tenant Construction Costs
        Lease Year                           Full         Operating                                                                                      Amortized    Amortized                             Annual      Aggregate
                                Square      Service        Expense                   Annual       Aggregate               TI     Landlord    Net Cash    Net Cash     Aggregate                Square      Occupancy     Annual
          Dec.        Nov.      Footage     Rental        & R.E. Tax     Electric     Rent         Annual               Cost     Allowance    Shortfall   Shortfall   Net Cash     Parking    Footage        Cost       Occupancy
  LY      1st     -   30th      Leased       Rate         Passthrus       Cost       P.S.F.         Rent                P.S.F.     P.S.F.      P.S.F.      P.S.F.      Shortfall    Cost      Occupied       P.S.F.       Cost

   4      2001    -   2002       33,000     $18.00          $1.68         $1.49      $21.17       $698,565                                                                         $99,600     33,000        $24.19      $798,165
   5      2002    -   2003       33,000     $18.00          $1.88         $1.53      $21.41       $706,652                                                                         $99,600     33,000        $24.43      $806,252

(Footnotes to this analysis are on the following page.)                                                                                                                                      LY 2001 - LY 2002
                                                                                                                                                                                             2 YEAR TOTAL:              $1,604,416

                                                                                                                                                                                             2 YEAR NPV @ 8.5%:         $1,420,510




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XYZ CORPORATION
    0



                  EXISTING LEASE OBLIGATION


Footnotes:


    (1) The lease year runs from December 1st of the year to November 30th of the following year.
    (2) The square footage leased by the Tenant.
    (3) The base rental rate is quoted on a full-service basis, including a base year index for operating expenses and real estate taxes.
    (4) The Tenant pays its proportionate share of operating expense and real estate tax passthroughs above a base year index of $5.00 p.s.f.
         Operating expenses and real estate taxes are estimated to be $6.50 p.s.f. in 2001 and increase by 100% of CPI (3.0%) per annum.
         As these costs are reconciled on a calendar year basis, they are pro-rated to reflect the Tenant's lease year.
    (5) The Tenant pays its proportionate share of electric costs, estimated to be $1.45 p.s.f. in 2001.
    (6) The annual rent per square foot (sum of columns 3, 4, & 5).
    (7) The aggregate annual rent (column 6 multiplied by column 2).
    (8) Not applicable.
    (9) Not applicable.
   (10) Not applicable.
   (11) Not applicable.
   (12) Not applicable.
   (13) In 2001, the Tenant pays for 24 unreserved spaces at $200 per space per month and 10 reserved spaces at $350 per space per month.
   (14) The square footage occupied by the Tenant.
   (15) The annual occupancy cost per square foot (column 16 divided by column 14).
   (16) The aggregate annual occupancy cost (sum of columns 7, 12, & 13).


Disclaimer:
         All information furnished regarding property for sale, rental, or financing is from sources deemed reliable. No express representation can be made, nor is any to be implied,
         as to the accuracy thereof and is submitted subject to errors, omissions, change of price, rental or other conditions, prior sale, leasing or financing, or withdrawal, without notice.
         The sale of a property will probably result in an increase in real estate taxes. Projections, if any, as to the rate of inflation, real estate taxes, operating expenses, and other variables
         are necessarily estimates only. No warranties or representations can be made as to the conditions of the property or any hazards contained therein nor are any to be implied.




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