Commercial Lease Calculator
Estimate your monthly and annual commercial rent costs based on square footage and lease terms.
How to Use the Commercial Lease Calculator
Navigating commercial real estate can be complex, especially when prices are quoted in annual dollars per square foot rather than a simple monthly flat rate. This calculator helps business owners, brokers, and landlords quickly translate those figures into actionable budgets.
Key Terms to Understand
- Rentable Square Feet (RSF): This is the total space you pay rent on. It often includes your usable space plus a portion of the building's shared areas (lobbies, hallways).
- Annual Rate per Sq. Ft.: This is the most common way commercial space is priced. If a space is 1,000 sq ft at $20/sq ft, your annual base rent is $20,000.
- CAM (Common Area Maintenance): These are operating expenses. In a "Triple Net" (NNN) lease, the tenant pays these on top of base rent. They include taxes, insurance, and maintenance.
- Lease Term: The duration of your commitment, typically ranging from 3 to 10 years for commercial properties.
Calculating Commercial Rent: The Formula
To calculate your base monthly rent manually, use the following formula:
(Square Footage × Annual Rate) ÷ 12 Months = Monthly Base Rent
If you are responsible for CAM or additional operating expenses, you simply add that monthly figure to your monthly base rent to find your total out-of-pocket cost.
Example Calculation
Suppose you are looking at an office space with the following details:
- Size: 3,000 Square Feet
- Rate: $25.00 per Sq. Ft. (Annual)
- CAM: $800.00 per month
- Term: 3 Years
Step 1: Calculate Annual Base Rent: 3,000 × $25 = $75,000.
Step 2: Calculate Monthly Base Rent: $75,000 ÷ 12 = $6,250.
Step 3: Calculate Total Monthly Rent: $6,250 + $800 = $7,050.
Step 4: Calculate Total Lease Value: $7,050 × 36 months = $253,800.
Types of Commercial Leases
Before signing, ensure you know which lease structure you are using:
- Full Service / Gross Lease: The landlord pays all operating expenses. Your rent is "all-inclusive."
- Triple Net (NNN): You pay base rent PLUS your share of taxes, insurance, and maintenance.
- Modified Gross: A middle ground where the tenant and landlord share certain costs.