Retail Rent Per Square Foot Calculator Formula

Understand the math behind the retail rent per square foot calculator. Each variable explained with a worked example.

Use the Retail Rent Per Square Foot Calculator

Formulas Used

Base Rent Per Sq Ft

base_rent_psf = rent_psf

Total Occupancy Cost Per Sq Ft

total_occ_psf = occ_cost_psf

Actual Occupancy Cost Ratio

actual_occ_ratio = actual_occ_pct

Sales Needed for Target Ratio

sales_needed = required_sales

Sales Per Sq Ft

annual_sales_psf = sales_psf

Monthly Total Occupancy Cost

monthly_occ = total_occ_cost / 12

Variables

VariableDescriptionDefault
annual_rentAnnual Base Rent(USD)84000
rentable_sqftRentable Square Feet(sq ft)2500
annual_nnnAnnual NNN Charges(USD)18000
target_occ_cost_pctTarget Occupancy Cost (% of sales)(%)10
annual_salesProjected Annual Sales(USD)800000
rent_psfDerived value= rentable_sqft > 0 ? annual_rent / rentable_sqft : 0calculated
total_occ_costDerived value= annual_rent + annual_nnncalculated
occ_cost_psfDerived value= rentable_sqft > 0 ? total_occ_cost / rentable_sqft : 0calculated
actual_occ_pctDerived value= annual_sales > 0 ? (total_occ_cost / annual_sales) * 100 : 0calculated
required_salesDerived value= target_occ_cost_pct > 0 ? total_occ_cost / (target_occ_cost_pct / 100) : 0calculated
sales_psfDerived value= rentable_sqft > 0 ? annual_sales / rentable_sqft : 0calculated

How It Works

Retail Rent Analysis

For retail tenants, the critical question is whether the rent is supportable by the expected sales volume. The occupancy cost ratio is the key metric.

Occupancy Cost Ratio

Occupancy Cost Ratio = Total Occupancy Cost / Annual Sales x 100

Total occupancy cost includes base rent, NNN charges, percentage rent (if applicable), and sometimes merchant association dues.

Target Ratios by Retail Type

  • Grocery/Supermarket: 2-4%
  • Restaurant: 6-10%
  • General retail: 8-12%
  • Specialty/Boutique: 10-15%
  • Service businesses: 12-18%

    • Sales Per Square Foot

    This metric allows comparison across different-sized spaces:

  • Strong retail: $300-$600 per sq ft
  • Average retail: $150-$300 per sq ft
  • Struggling retail: Under $150 per sq ft

    • Worked Example

    $84,000 annual rent for 2,500 sq ft, $18,000 NNN charges, targeting 10% occupancy cost, with $800,000 projected sales.

    annual_rent = 84000rentable_sqft = 2500annual_nnn = 18000target_occ_cost_pct = 10annual_sales = 800000
    1. 01Base rent per sq ft: $84,000 / 2,500 = $33.60
    2. 02Total occupancy cost: $84,000 + $18,000 = $102,000
    3. 03Occupancy cost per sq ft: $102,000 / 2,500 = $40.80
    4. 04Actual occupancy ratio: $102,000 / $800,000 = 12.8%
    5. 05Sales needed for 10% target: $102,000 / 10% = $1,020,000
    6. 06Sales per sq ft: $800,000 / 2,500 = $320

    Ready to run the numbers?

    Open Retail Rent Per Square Foot Calculator