10 Aug
2007
10 Aug
'07
12:49 p.m.
On Fri, 10 Aug 2007, James Propp wrote:
Let's change the scenario: I invest $5,000,000 in a three-story office building and you invest $3,000,000. There are three tenants: Propp Enterprises, Zucker Enterprises, and Yoyodyne Incorporated, each of which occupies one floor. If the rent we charge Yoyodyne is $8,000 per month, how should you and I split it? Would you really settle for just $1,000 per month, even though you put up 3/8 of the money for the building?
Good scenario, but let's make the numbers more extreme. You pay $1,000,000 and I pay $1 to build the building, and Yoyodine pays $1,000,000/month rent. Each of us gets one floor of the building. Do I get $1 per month plus free rent, or do I owe you something for my floor's rent?