108. How to Calculate Commercial Rent [Price Per Square Foot Simplified]

How to Calculate Commercial Rent [Price Per Square Foot Simplified]

Today, I'm going to teach you how to calculate commercial rents based on price per square foot. Commercial real estate, much like other industries, is rampant with its own unique lingo. Words like “triple net” and “cap rate” are thrown around as if they’re common knowledge, but if you’re not in commercial real estate, you likely won’t be able to keep up with the various terms. Calculating commercial rent can be just the same. When a commercial real estate broker or property owner tells you that their property is “$32.00 per foot, triple net,” what does that actually mean? Wouldn’t it be easier if rent was just given on a total monthly amount? Well, yes and no. Commercial rents are calculated on a price per square foot basis because, more often than not, spaces may be divided or combined. These numbers give industry professionals a quick snapshot to compare rent prices among various properties. After all - $5,000 per month doesn’t tell you how big the space is or what is included in the base rent. Here's how to calculate commercial rents when you've been given a price per square foot and I'll also include a commercial rent calculator.

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About Your Host:

Tyler Cauble, Founder & President of The Cauble Group, is a commercial real estate broker and investor based in East Nashville. He’s the best selling author of Open for Business: The Insider’s Guide to Leasing Commercial Real Estate and has focused his career on serving commercial real estate investors as a board member for the Real Estate Investors of Nashville.