Free Commercial Lease Calculator

Calculate the total cost of a commercial lease including base rent, annual escalations, common area maintenance, and other charges.

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Year 1 Monthly Total

$10,000.00

Year 1 Annual Total$120,000
Annual Base Rent$75,000
Annual NNN Charges$45,000
Free Rent Savings$12,500
Effective Rent Per Sqft$40.71

Year 1 Monthly Total vs Lease Term

View formula & how it works →

Commercial Lease Types

Commercial leases come in several structures that determine who pays operating expenses.

Common Structures

  • Gross Lease: Landlord pays all operating expenses; rent is all-inclusive
  • Modified Gross: Tenant pays some expenses (often utilities and janitorial)
  • Triple Net (NNN): Tenant pays base rent + CAM + insurance + property tax
  • Absolute Net: Tenant pays everything including structural repairs

    • Key Terms

  • CAM (Common Area Maintenance): Shared building costs (cleaning, landscaping, management)
  • Escalation: Annual rent increase (fixed percentage or CPI-based)
  • Free Rent / Concession: Rent-free months at lease start
  • TI Allowance: Landlord contribution toward tenant improvements

    • Evaluating a Lease

    Always calculate the effective rent per square foot over the full term, accounting for escalations, free rent, and TI allowance.

    Example Calculation

    3,000 sqft NNN lease at $25/sqft base rent, $8 CAM, $2 insurance, $5 tax. 3% annual escalation, 5-year term, 2 months free rent.

    1. 01Annual base rent: 3,000 x $25 = $75,000
    2. 02Annual CAM: 3,000 x $8 = $24,000
    3. 03Annual insurance: 3,000 x $2 = $6,000
    4. 04Annual tax: 3,000 x $5 = $15,000
    5. 05Annual NNN charges: $24,000 + $6,000 + $15,000 = $45,000
    6. 06Year 1 total: $75,000 + $45,000 = $120,000 ($10,000/month)
    7. 07Free rent value: $75,000 / 12 x 2 = $12,500
    8. 08Total base rent over 5 years (with escalation): approximately $397,728

    Frequently Asked Questions

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