Commercial Lease Calculator
Calculate monthly and annual rent costs including escalations.
Per Square Foot / Year
Per Square Foot / Month
Initial Monthly Base Rent:
$0.00
Total Monthly Payment (Year 1):
$0.00
Total Annual Rent (Year 1):
$0.00
Average Monthly Rent (Full Term):
$0.00
Total Commitment (Entire Term):
$0.00
How to Use the Commercial Lease Calculator
Whether you are a startup looking for its first office or a seasoned retailer expanding your footprint, understanding the true cost of a commercial lease is vital. This calculator helps you break down complex lease terms into manageable monthly and annual figures.
Understanding Commercial Rent Formulas
In the commercial real estate (CRE) world, rent is most commonly quoted in one of two ways:
- Annual PSF (Per Square Foot): Common in office and industrial leases. You multiply the rate by the total area and divide by 12 to find the monthly rent.
- Monthly PSF: Common in retail leases in certain regions. You multiply the rate directly by the total area to find the monthly rent.
Example Calculation:
If you lease 2,000 square feet at $30.00 per square foot (Annual):
2,000 SF × $30.00 = $60,000 per year.
$60,000 ÷ 12 months = $5,000 base rent per month.
If you lease 2,000 square feet at $30.00 per square foot (Annual):
2,000 SF × $30.00 = $60,000 per year.
$60,000 ÷ 12 months = $5,000 base rent per month.
Key Lease Terms Explained
Annual Escalations
Most commercial leases include an "escalation clause." This is a pre-negotiated percentage increase in rent that occurs every year (usually on the anniversary of the lease start date). Typical escalations range from 2% to 5% to account for inflation and market growth.
CAM and NNN (Additional Rent)
The "Base Rent" is often only part of the story. In Triple Net (NNN) leases, the tenant is also responsible for their share of property taxes, insurance, and Common Area Maintenance (CAM). These are often called "pass-through expenses" and should be added to your monthly budget.
Lease Term Commitment
The "Total Commitment" figure in our calculator represents the total amount of money you are legally obligated to pay the landlord over the life of the lease. This is a critical number for business planning and securing financing.
Common Commercial Lease Types
- Full Service Lease (Gross): The landlord pays all operating expenses. The tenant pays one lump sum.
- Modified Gross: The tenant pays base rent plus a proportional share of some expenses (like utilities).
- Triple Net (NNN): The tenant pays base rent plus almost all operating costs, taxes, and insurance.