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Compares the Right to Return Rent with the rent needed to justify the cost of the <br />substantial remodel <br />1.Right to Return Rent <br />Rent when tenancy was terminated plus any TPA allowable increases <br />2.Baseline Stabilized Rent <br />Right to Return Rent plus 5% projected rent increases two years post remodel <br />3.Substantial Remodel Cost Supported by Baseline Stabilized Rent <br />Substantial remodel costs that could be supported by baseline stabilized rent using <br />cap rate* for Bay Area <br />*A cap rate is a real estate metric used to estimate potential return on investment <br />4.Feasibility Test <br />Are the substantial remodel costs that could be supported by the baseline stabilized <br />rent higher or lower than the actual substantial remodel costs? <br />5.Fair Rate of Return Rent (if applicable) <br />Rent calculated using actual substantial remodel costs and cap rate <br />9 of 16 <br />Standard for Approving a Fair Rate of <br />Return Appeal