function calculateLease() {
var sqft = parseFloat(document.getElementById('sqft').value);
var baseRate = parseFloat(document.getElementById('baseRate').value);
var camRate = parseFloat(document.getElementById('camRate').value);
var term = parseFloat(document.getElementById('leaseTerm').value);
var escalation = parseFloat(document.getElementById('escalation').value) / 100;
if (isNaN(sqft) || isNaN(baseRate) || isNaN(term)) {
alert("Please enter valid numbers for Square Footage, Base Rent, and Lease Term.");
return;
}
if (isNaN(camRate)) camRate = 0;
if (isNaN(escalation)) escalation = 0;
var currentAnnualBaseRate = baseRate;
var totalCommitment = 0;
var yearOneMonthlyBase = (sqft * baseRate) / 12;
var monthlyCAM = sqft * camRate;
var escalationDetails = "Annual Breakdown:";
for (var i = 1; i <= term; i++) {
var annualBaseForYear = sqft * currentAnnualBaseRate;
var annualCAMForYear = (sqft * camRate) * 12;
var totalForYear = annualBaseForYear + annualCAMForYear;
totalCommitment += totalForYear;
escalationDetails += "Year " + i + ": $" + totalForYear.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}) + " (Base: $" + currentAnnualBaseRate.toFixed(2) + "/SF)";
// Apply escalation for next year
currentAnnualBaseRate = currentAnnualBaseRate * (1 + escalation);
}
document.getElementById('monthlyBase').innerText = "$" + yearOneMonthlyBase.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('monthlyCAM').innerText = "$" + monthlyCAM.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalMonthly').innerText = "$" + (yearOneMonthlyBase + monthlyCAM).toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('totalCommitment').innerText = "$" + totalCommitment.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById('escalationTable').innerHTML = escalationDetails;
document.getElementById('results').style.display = 'block';
}
How to Calculate a Commercial Lease
Understanding your commercial lease obligations is critical for business budgeting. Unlike residential leases, commercial real estate (CRE) is typically priced by the square foot rather than a flat monthly fee. This calculator helps you navigate the complexities of base rent, additional charges, and annual rent escalations.
Key Components of Commercial Rent
Square Footage (SF): The total usable or rentable area. In many buildings, "rentable" square feet includes a portion of common areas (lobby, hallways).
Base Rent: Usually quoted as an annual dollar amount per square foot. Example: $20.00/SF.
CAM Charges: Common Area Maintenance. This covers insurance, property taxes, and maintenance. In a Triple Net (NNN) lease, the tenant pays these on top of base rent.
Escalations: Most commercial leases include a clause that increases the rent annually, often by a fixed percentage (e.g., 3%) or based on the Consumer Price Index (CPI).
The Formula
Monthly Base Rent = (Square Footage × Annual Base Rate) ÷ 12 Total Monthly Payment = Monthly Base Rent + (Monthly CAM per SF × Square Footage)
Example Calculation
Imagine you are leasing a 3,000 SF office space:
Base Rent: $30.00/SF per year
CAM: $0.60/SF per month
Lease Term: 3 Years
Annual Escalation: 3%
In Year 1, your monthly base rent would be $7,500. Adding the $1,800 CAM charge results in a total monthly payment of $9,300. In Year 2, the base rent would increase by 3% to $30.90/SF, making your new monthly total approximately $9,525.
Different Lease Types to Consider
Before signing, ensure you know which type of lease you are entering:
Full Service / Gross Lease: The landlord pays all operating expenses. The tenant pays one flat rate.
Modified Gross Lease: The tenant and landlord share operating expenses.
Triple Net (NNN) Lease: The tenant pays base rent plus their pro-rata share of all property taxes, insurance, and maintenance.