Commercial Lease Calculator
Calculate commercial lease costs for NNN, gross, and modified gross leases.
See your monthly rent, annual cost, and total lease expense.
How Commercial Lease Costs Are Calculated
Commercial leases are priced per square foot per year (annual) or per month, depending on the lease type. There are three main structures, each shifting different costs to the tenant.
Lease types:
- Gross lease: Tenant pays one flat rent; landlord covers property taxes, insurance, and maintenance
- Net lease (NNN): Tenant pays base rent plus their share of taxes, insurance, and CAM (Common Area Maintenance)
- Modified gross: Hybrid — tenant pays base rent plus some expenses, negotiated individually
NNN lease monthly cost formula:
Monthly Cost = (Base Rent per SF × SF ÷ 12) + (NNN Expenses per SF × SF ÷ 12)
Worked example:
- Space: 2,500 sq ft
- Base rent: $18/SF/year
- NNN expenses: $6/SF/year
Base rent monthly = ($18 × 2,500) ÷ 12 = $3,750/month NNN monthly = ($6 × 2,500) ÷ 12 = $1,250/month Total monthly = $5,000
CAM charges (Common Area Maintenance) typically cover:
- Parking lot upkeep, landscaping, security lighting
- Lobby and hallway cleaning
- Property management fees (usually 5–15% of base rent)
Rent escalation clauses:
Most commercial leases include annual rent increases:
Year N rent = Base rent × (1 + escalation rate)^N
At 3% annual escalation, a $3,750/month base rent becomes $4,347/month by year 5.
Key negotiation points:
- Tenant improvement allowance (TIA): Landlord contribution to fit-out costs, typically $20–$80/SF
- Free rent period: 1–6 months common for new tenants signing 5+ year leases
- Exclusivity clause: Prevents landlord from leasing adjacent space to your direct competitors