Final answer:
To calculate the effective monthly rent payment, follow these three steps: calculate the annual rent, account for the concession, and calculate the effective monthly rent payment.
Step-by-step explanation:
To calculate the effective monthly rent payment, we need to consider the lease term, concession, rental space, rental rate, and the landlord's discount rate. Here are the three steps:
Step 1: Calculate the Annual Rent
Multiply the rental space (6200 square feet) by the rental rate ($24 per square foot per year) to get the annual rent.
Annual Rent = Rental Space * Rental Rate
In this case, the annual rent would be $148,800.
Step 2: Account for the Concession
Subtract the concession (18 months of free rent) from the lease term (7 years) to get the effective leasing period.
Effective Leasing Period = Lease Term - Concession
In this case, the effective leasing period would be 5.5 years.
Step 3: Calculate the Effective Monthly Rent Payment
Divide the annual rent by the effective leasing period and by 12 to get the effective monthly rent payment.
Effective Monthly Rent Payment = Annual Rent / (Effective Leasing Period * 12)
In this case, the effective monthly rent payment would be $2,000.