How it works
Write the cash list first. Then decide what the page is measuring.
- Build both occupancy stacks.
- Add move, furniture, and leftover build-out to the move path.
- Add downtime if the team cannot work.
- Name the option value of staying.
- Then discount both.
Formula in words. Relocation cash = new stack + move + downtime. Renewal cash = stay stack. Compare today's dollars.
| Input | Meaning |
|---|---|
| Stay stack | Renewal rent and extras |
| Move stack | New rent and extras |
| Move cost | One-time |
| Downtime | Lost work or dual rent |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$41,500
Lease B start rent$38,595
Discount rate8%
Sample NPV A$375,387
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $41,500 | $38,595 |
| Year-1 extras | $9,200 | $9,844 |
| Year-1 credit | $8,000 | $4,400 |
| Sample NPV | $375,387 | $361,649 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $41,500 | $9,200 | $8,000 | $42,700 | $39,537 |
| Year 2 | $42,745 | $9,476 | $0 | $52,221 | $44,771 |
| Year 3 | $44,027 | $9,760 | $0 | $53,787 | $42,698 |
| Year 4 | $45,348 | $10,053 | $0 | $55,401 | $40,721 |
| Year 5 | $46,709 | $10,355 | $0 | $57,064 | $38,837 |
| Year 6 | $48,110 | $10,666 | $0 | $58,776 | $37,039 |
| Year 7 | $49,553 | $10,986 | $0 | $60,539 | $35,324 |
| Year 8 | $51,040 | $11,316 | $0 | $62,356 | $33,689 |
| Year 9 | $52,571 | $11,655 | $0 | $64,226 | $32,129 |
| Year 10 | $54,148 | $12,005 | $0 | $66,153 | $30,642 |
| Sample NPV | — | — | — | — | $375,387 |
How to read the sample
Sample NPV for Stay-versus-move sample is about $375,387. A second path lands near $361,649. That gap is a talking point, not a promise.
Year notes for Stay-versus-move sample
- Year 1 of Stay-versus-move sample has rent of $41,500.
- Shared building cost is $9,200.
- A credit of $8,000 lowers the cash you pay that year.
- Cash out this year is about $42,700. The stay path has a smaller credit and no move bill.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $39,537 today.
- Next, year 2 rent is $42,745.
- CAM, which is a shared building cost, is $9,476.
- There is no credit in this year.
- You pay about $52,221 this year after extras and credits. A move path would spend more in year one.
- Time shrinks later cash. At 8 percent, year 2 is worth about $44,771 today.
- Then year 3 rent is $44,027.
- Extras for the building come to $9,760.
- Credits skip this year.
- The net cash this year is about $53,787. Year two is the first fair rent fight.
- Waiting has a price. At 8 percent, year 3 is worth about $42,698 today.
- After that, year 4 rent is $45,348.
- The shared building cost this time is $10,053.
- No extra credit shows up this year.
- Cash out this year is about $55,401. Later years decide if the new sticker was worth the move.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $40,721 today.
- In year 5 of Stay-versus-move sample, rent is $46,709.
- Shared building cost is $10,355.
- There is no credit in this year.
- You pay about $57,064 this year after extras and credits. The last year still sits in both terms.
- Time shrinks later cash. At 8 percent, year 5 is worth about $38,837 today.
- Year 6 of Stay-versus-move sample has rent of $48,110.
- CAM, which is a shared building cost, is $10,666.
- Credits skip this year.
- The net cash this year is about $58,776. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $37,039 today.
- Next, year 7 rent is $49,553.
- Extras for the building come to $10,986.
- No extra credit shows up this year.
- Cash out this year is about $60,539. 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 $35,324 today.
- Then year 8 rent is $51,040.
- The shared building cost this time is $11,316.
- There is no credit in this year.
- You pay about $62,356 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 $33,689 today.
- After that, year 9 rent is $52,571.
- Shared building cost is $11,655.
- Credits skip this year.
- The net cash this year is about $64,226. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $32,129 today.
- In year 10 of Stay-versus-move sample, rent is $54,148.
- CAM, which is a shared building cost, is $12,005.
- No extra credit shows up this year.
- Cash out this year is about $66,153. 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 $30,642 today.
Add those year values. The sample NPV for Stay-versus-move sample is about $375,387. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.