Calculators
Commercial Lease Comparison Calculator
Compare two commercial leases on total occupancy cost over the term and effective rent per square foot, after escalations, free rent and allowances.
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The tool
Enter your numbers below. Results update as you type, and nothing leaves your browser.
Everything you enter stays on your own machine. Nothing is sent to us or to anyone else, which you can confirm in your browser network tab.
What people use it for
- Choosing between office or retail spaces
- Negotiating lease terms
- Budgeting occupancy costs
- Advising clients on leases
About this tool
What the Commercial Lease Comparison Calculator does
Commercial leases differ in rent, escalations, operating cost charges, rent-free months and tenant improvement allowances, so headline rents are not comparable. This calculator totals the cost of each lease over its term and converts it into an effective annual rent per square foot.
It also works as a commercial lease cost comparison calculator.
Formula
- Yearly cost = area × (base rent + operating costs) × (1 + escalation)^year
- Total = Σ yearly cost − rent-free months − improvement allowance
- Effective cost = total ÷ area ÷ term
Worked example
Using the starting values in the calculator above:
| Input | Value |
|---|---|
| Lease A: area | 3,000 sq ft |
| Lease A: base rent per sq ft per year | $28.00 |
| Lease A: operating costs per sq ft per year | $8.00 |
| Lease A: annual escalation | 3% |
| Lease A: rent-free months | 2 |
| Lease A: improvement allowance | $30,000 |
| Lease A: term | 5 years |
| Lease B: area | 3,200 sq ft |
| Lease B: base rent per sq ft per year | $25.00 |
| Lease B: operating costs per sq ft per year | $9.00 |
| Lease B: annual escalation | 4% |
| Lease B: rent-free months | 0 |
| Lease B: improvement allowance | $0.00 |
| Lease B: term | 5 years |
| Result | Value |
|---|---|
| Lower effective cost per sq ft | Lease A |
| Lease A effective cost per sq ft per year | $35.29 |
| Lease B effective cost per sq ft per year | $36.83 |
| Lease A total cost | $529,387 |
| Lease B total cost | $589,296 |
| Difference in total cost | $59,909 |
How to read the result
Compare on cost per square foot only if both spaces suit you equally; a larger or better-laid-out space may justify a higher total.
Operating cost charges in net leases can rise faster than base rent. Ask for caps on controllable expenses.
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Questions
Questions about this tool
The things clients actually want to know — costs, timelines, ownership and what happens after launch.
The average cost per square foot per year after escalations, free rent and allowances are taken into account.
A lease where the tenant pays property taxes, insurance and maintenance in addition to base rent.
The landlord contributes money towards fitting out the space, which reduces the tenant's effective cost.
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