Commercial Lease Calculator
Lease Summary
Initial Monthly Base Rent:
$0.00
Initial Total Monthly Payment:
$0.00
First Year Total Rent:
$0.00
Total Commitment (Full Term):
$0.00
Understanding Your Commercial Lease Calculation
Calculating the true cost of a commercial lease is more complex than residential renting. Most commercial properties are priced per square foot on an annual basis. Our calculator helps you break down these costs, including Common Area Maintenance (CAM) and annual rent escalations.
Key Terms Explained
- Square Footage (SF): The total usable or rentable area of the space.
- Annual Rate per SF: The base price you pay per square foot each year. For example, 2,000 SF at $20/SF equals $40,000 in annual base rent.
- CAM Charges: Common Area Maintenance. These are operating expenses (janitorial, landscaping, snow removal, property taxes) passed through to the tenant.
- Escalation: A clause in the lease that increases the base rent annually, often by a fixed percentage (e.g., 3%) or based on the Consumer Price Index (CPI).
Common Lease Types
The calculation can change depending on your lease structure:
- Triple Net (NNN): The tenant pays base rent plus taxes, insurance, and maintenance.
- Full Service Gross: The landlord pays all operating expenses; the tenant pays one flat rate.
- Modified Gross: A compromise where the tenant and landlord share operating expenses.
Example Calculation
Imagine you are leasing a 3,000 SF retail space at $25.00/SF annually with a 3% escalation and $800/month in CAM fees for a 3-year term:
- Year 1 Base Rent: 3,000 * $25 = $75,000/year ($6,250/month).
- Year 1 Total: $75,000 + ($800 * 12) = $84,600.
- Year 2 Base Rent: $75,000 * 1.03 = $77,250.
- Year 3 Base Rent: $77,250 * 1.03 = $79,567.50.