How it works
Write the cash list first. Then decide what the page is measuring.
- Start with base rent by year.
- Add extras the tenant actually pays.
- Subtract credits in the right year.
- Leave out one-time move costs unless the client asked to include them.
- Name every line so no one has to guess.
Formula in words. Year cash = rent + extras − credits. Then shrink each year and add.
| Input | Meaning |
|---|---|
| Base rent | The rent line before extras |
| CAM | Shared building cost |
| Tax | The tenant share of property tax |
| Insurance | The tenant share of building insurance |
| Credits | Free rent and TI money |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$39,000
Lease B start rent$36,270
Discount rate8%
Sample NPV A$369,437
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $39,000 | $36,270 |
| Year-1 extras | $11,000 | $11,770 |
| Year-1 credit | $14,000 | $7,700 |
| Sample NPV | $369,437 | $360,433 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $39,000 | $11,000 | $14,000 | $36,000 | $33,488 |
| Year 2 | $39,975 | $11,330 | $0 | $51,305 | $44,396 |
| Year 3 | $40,974 | $11,670 | $0 | $52,644 | $42,376 |
| Year 4 | $41,999 | $12,020 | $0 | $54,019 | $40,449 |
| Year 5 | $43,049 | $12,381 | $0 | $55,430 | $38,610 |
| Year 6 | $44,340 | $12,752 | $0 | $57,092 | $36,993 |
| Year 7 | $45,670 | $13,135 | $0 | $58,805 | $35,445 |
| Year 8 | $47,040 | $13,529 | $0 | $60,569 | $33,961 |
| Year 9 | $48,451 | $13,935 | $0 | $62,386 | $32,540 |
| Year 10 | $49,905 | $14,353 | $0 | $64,258 | $31,178 |
| Sample NPV | — | — | — | — | $369,437 |
How to read the sample
Sample NPV for Cost-stack sample is about $369,437. A second path lands near $360,433. That gap is a talking point, not a promise.
Year notes for Cost-stack sample
- Year 1 of Cost-stack sample has rent of $39,000.
- Shared building cost is $11,000.
- A credit of $14,000 lowers the cash you pay that year.
- Cash out this year is about $36,000. Extras are large here because this is a net path.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $33,488 today.
- Next, year 2 rent is $39,975.
- CAM, which is a shared building cost, is $11,330.
- There is no credit in this year.
- You pay about $51,305 this year after extras and credits. Rent steps and extras step with it.
- Time shrinks later cash. At 8 percent, year 2 is worth about $44,396 today.
- Then year 3 rent is $40,974.
- Extras for the building come to $11,670.
- Credits skip this year.
- The net cash this year is about $52,644. No credit remains after year one.
- Waiting has a price. At 8 percent, year 3 is worth about $42,376 today.
- After that, year 4 rent is $41,999.
- The shared building cost this time is $12,020.
- No extra credit shows up this year.
- Cash out this year is about $54,019. Later extras still belong in the sum.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $40,449 today.
- In year 5 of Cost-stack sample, rent is $43,049.
- Shared building cost is $12,381.
- There is no credit in this year.
- You pay about $55,430 this year after extras and credits. Dropping extras here would fake a win.
- Time shrinks later cash. At 8 percent, year 5 is worth about $38,610 today.
- Year 6 of Cost-stack sample has rent of $44,340.
- CAM, which is a shared building cost, is $12,752.
- Credits skip this year.
- The net cash this year is about $57,092. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $36,993 today.
- Next, year 7 rent is $45,670.
- Extras for the building come to $13,135.
- No extra credit shows up this year.
- Cash out this year is about $58,805. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $35,445 today.
- Then year 8 rent is $47,040.
- The shared building cost this time is $13,529.
- There is no credit in this year.
- You pay about $60,569 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $33,961 today.
- After that, year 9 rent is $48,451.
- Shared building cost is $13,935.
- Credits skip this year.
- The net cash this year is about $62,386. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $32,540 today.
- In year 10 of Cost-stack sample, rent is $49,905.
- CAM, which is a shared building cost, is $14,353.
- No extra credit shows up this year.
- Cash out this year is about $64,258. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $31,178 today.
Add those year values. The sample NPV for Cost-stack sample is about $369,437. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.