Private real estate - Utility expenses

CFA Level II Alternative Investments
#1

Cfai textbook example 20

utilities assumed to be 25% fixed and 75% variable. If 200k sq ft was fully occupied, utility expense would be $4/sq ft. What is the utility expenses per occupied sq ft if the building is 80% occupied?

solution: fixed is 1.25/sq ft while variable portion is $3/sq ft.

How is that possible that the total utility expense if building is 80% occupied higher than fully occupied? Anything that I missed out here?

#2

fixed has gotta be 1/sf and variables gotta be 3/sf, i think

#3

fixed means fixed costs that do not care about rate of occupancy.

so assuming $4/sqft at full 200k sqft. means total utility expenses is $800k with 25% of that fixed, being $200k.

at 80% occupancy, we have 160ksqft leased and so our $200k fixed costs divided by the 160ksqft yields $1.25/sqft