Do the Math Yourself

[Friday, 18 February 2005::Arizona Republic::East Valley Opinions]
Dan Durrenberger wrote a column indicating that Arizona State University (ASU) should consider leasing out some of its lakefront property in Tempe.

Durrenberger offered two scenarios: selling land or leasing it.

With respect to selling the land, Durrenberger informs us that it may fetch $22 per square foot. ASU has 36.32 acres of land they could sell. He tells us that the land would fetch $34.8 million. He then told us to do the math ourself.

Durrenberger provided help to those of us who opted to do the math. He informed us that 1 acre equals 43,560 square feet. I used Google's calculator to confirm Durrenberger's data.

   43,560 sq. ft.
   --------------  x  36.32 acres  =  1,582,099.20 sq. ft.
       1 acre                         

   1,582,099.20 sq. ft.  x  ---------  =  $34,806,182.40
                            1 sq. ft.

He offered another example where the land sold for $30 per square foot. Do the math yourself.

With respect to leasing the land, Durrenberger informs us that 10% of the cost of a square foot is an estimate of what ASU could lease the land for. He tells us that it would yield an annual revenue of $3.48. He didn't tell us to do the math, but let's do the math anyway.

   $22 x 10% = $2.20

   1,582,099.20 sq. ft.  x   ---------  =  $3,480,618.24
                             1 sq. ft.

Our answer matches Durrenberger's.

Durrenberger pretends nothing will change for the next 30 years and that over this time period ASU will receive more that $142 million. Do the math yourself to see if he is right.

Creator: Gerald D. Thurman []
Created: 18 February 2005

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Arizona State University is located in Tempe, Arizona .

Tempe's main drag is Mill Avenue and Mill Avenue is home to ASU's Ira A. Fulton School of Engineering [ zoomed]