In addition to operating expenses, additional items requiring cash outlays include tenant
improvements and capital expenditures (CAPEX). These items are likely to occur
irregularly depending on the rate of lease turnover and when major expenditures must be
made to repair capital items (such as roofs, etc.). Exhibit 9–8 includes such an allowance
(see: CAPEX/Improve allowance); this is an annual average for such items. As will be
shown later, when doing an investment analysis, a multiperiod statement of cash flow
should be developed and actual expenditures used instead of an average