Work out the true cost of a commercial lease after free rent, tenant improvement allowance, annual escalations, and NNN charges. Update any input — the effective rent and year-by-year schedule recalculate instantly. Share the URL to send your analysis to a business partner.
| Year | Rent / SF | Base rent | NNN | Concessions | Net year | Cumulative |
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Effective rent is the true per-square-foot cost of your lease after all concessions, escalations, and pass-through costs are accounted for. It's the right number to use when comparing two lease offers.
Formula: (Total base rent + Total NNN − Free rent value − TI allowance total) ÷ Square feet ÷ Term years
Asking rent is what the landlord advertises. Effective rent is what you actually pay. A $40/SF asking rent with 9 months free rent and $50/SF TI on a 7-year term often produces an effective rent in the low $30s — a quarter of the advertised rate never shows up on the rent roll.
This calculator is a negotiation tool. Adjust the inputs to model alternative offers: What happens if I push TI to $65/SF? What if I get 3 more months free rent? What if I shorten the term to 5 years? The effective rent tells you which levers matter most.
Checking a single quote instead of a whole deal? Effective rent answers what the term costs you overall. To take one rate apart — base versus NNN, rentable versus usable, and whether the number is defensible against what comparable buildings actually sold for — use the rent per square foot calculator.
This calculator shows you the math. Justin brings the market comps, landlord intel, and negotiation experience that turns numbers on a screen into signed terms on a page.
Schedule a Free Consultation →Landlords quote a starting rate. What you actually commit to is the total of every payment across the term, net of whatever you were given to sign — and two deals with the same headline number routinely differ by six figures once that is worked out.
Three things drive the gap. Escalations compound: 3% a year on a ten-year term means your final year costs about 30% more than your first, and a deal at $30 escalating at 3% overtakes a deal at $32 escalating at 1.5% well before the term ends. Free rent is real money but only once — three months abated on a five-year deal is worth about 5% of the term, not the 25% it feels like in month one. Tenant improvement either offsets your capital or gets amortised back into the rate, and the calculator above shows which.
Effective rent — total cost across the term divided by the months and the square footage — is the only number that lets you compare two proposals honestly. It is also the number landlords are least keen to discuss, because it is where concessions that looked generous stop looking generous.
A longer commitment is worth money to a landlord. It removes vacancy risk, defers the next leasing commission and improves how the building finances. If you are giving that, you should be paid in rate, in concessions, or in flexibility written into the document.
The flexibility is usually the better trade and it is the one tenants forget to ask for. A renewal option at a pre-agreed rate or a market rate with a stated methodology. An expansion right on adjacent space. A right of first refusal. An early-termination right with a defined fee. Each costs the landlord little on the day you sign and can be worth a great deal to you in year six.
What you should resist is a long term at a rate that assumes the market only goes one way. Recorded tri-county commercial sale volume fell roughly 46% between 2021 and 2025 while median price per square foot rose about 46% — values kept climbing while transactions thinned. Markets that move like that do not move in a straight line forever, and a ten-year commitment with no exit is a bet that they do.
A gross rate and a triple-net rate are not comparable, and the gap is commonly $8 to $14 a foot. Establish which you are looking at before comparing anything, and ask for the current-year operating expense figure per foot rather than last year's budget — Florida insurance has moved enough that stale numbers mislead.
You are quoted on rentable square feet, which include your share of corridors, lobbies and restrooms. Usable is what sits inside your walls. A 15% load and a 32% load on the same rentable figure differ by hundreds of usable feet, so the same effective rent buys materially different space.
Buildout beyond the allowance, moving, cabling, signage, furniture, and the weeks your team spends on the move rather than on the business. On a first lease these frequently exceed a year of rent, and they belong in the comparison from the start.
Personal guarantees, relocation rights, recapture on a sublease request, holdover at 150% or 200%, and restoration obligations at the end of the term. None of them appear in a rate and all of them are money. They are also far easier to limit before signing than to escape afterwards.
The total of everything you pay across the term, net of free rent and any tenant improvement contribution, divided by the months and the square footage. It is the only basis on which two proposals with different concession packages can be compared honestly, and it frequently reverses which deal looked better on the headline rate.
More than they look. A 3% annual increase means the final year of a ten-year term costs roughly 30% more than the first. A deal starting at $30 escalating at 3% overtakes one starting at $32 escalating at 1.5% before the term is out, so the escalation rate deserves as much attention as the starting rate.
It depends on the term. Free rent is a one-time benefit while a lower rate compounds across every year, so abatement tends to win on short terms and a rate reduction on long ones. Run both to an effective rent before choosing — and take abatement up front rather than spread, since cash earlier is worth more.
Only if you are paid properly for it and keep an exit. Term is genuinely valuable to a landlord, so it should buy you rate, concessions or flexibility. What makes a long term dangerous is signing one with no renewal option, no expansion right and no termination mechanism.
Operating expenses if the quote is net, buildout beyond the allowance, moving, cabling, signage and furniture — plus contingent costs buried in the lease such as holdover penalties, restoration obligations and unamortised allowance repayable on early exit. On a first lease the move-in costs alone often exceed a year of rent.
