CRE Finance HW Help!
I am having trouble with the following questions for my HW assignment. The assignment requires us to calculate these answers in excel:

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**1.  Determine the Base Rent which would be projected, assuming the following information:**

Renewal Rent (psf)     $15.00

Market Rent (psf)       $20.00

Renewal Probability    50%

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**2.  Tenant improvements (TI's) today are estimated to be $12.00 psf for inline tenant spaces, assuming the tenant vacates.  TI's for renewing tenants are expected to be $4.00 psf.  The inflation rate is expected to be 2.5% per year.  What are the TI costs expected to be incurred by the Landlord, assuming a 60% chance that the 2,000 SF tenant renews at the end of the 5 year lease, which commences today.**

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**3.  What is the Reversion at the end of a 10 year hold, assuming the following?  This is a leveraged IRR.**

Year 10 NOI         $496,000

Year 11 NOI         $512,000

Costs of Sale        3%

Terminal Cap Rate   8.25%

Outstanding Principal (end of year 10)   $2,650,000

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Any help appreciated!
[{"id": "eurgg5n", "text": "My best shot at it below. I didn't want to give you straight answers since it's better if you fully understand how the numbers are calculated.\n\n1) Base Rent = (50%* Market Rent) + (50%* Renewal Rent)\n\n2) You would need to inflate the Market TI and Renewal TI by 2.5% annually for 5 years\n\nThan input into the equations below:\n\nProjected TI = (Inflated Market TI * 40%)+(Inflated Renewal TI * 60%)\n\nLandlord Expected TI Costs = Projected TI * 2,000 SF\n\n3) \n\nSales Price = 11 YR NOI /Terminal Cap Rate\n\nCost of Sale = .03 * Sales Price\n\nReversion = Sales Price - Cost of Sale - Outstanding Balance", "replies": [{"id": "eurmzwi", "text": "This was extremely helpful. Thank you!", "replies": [], "depth": 2}], "depth": 1}, {"id": "eurir7v", "text": "What text book are you using?", "replies": [], "depth": 1}]