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Price Per Square Foot Formula:
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The Price Per Square Foot calculation is a standard metric used in commercial real estate to compare lease rates across different properties. It helps tenants and landlords evaluate the cost efficiency of commercial spaces.
The calculator uses the simple formula:
Where:
Explanation: This calculation standardizes lease costs to a per-square-foot basis, allowing for easy comparison between properties of different sizes.
Details: This metric is crucial for commercial tenants to budget effectively, compare different leasing options, and negotiate favorable lease terms. For landlords, it helps in setting competitive rental rates.
Tips: Enter the total annual lease cost and the total square footage of the space. Both values must be positive numbers. The calculator will compute the price per square foot.
Q1: What's included in the annual lease cost?
A: Typically includes base rent, common area maintenance (CAM) charges, property taxes, and insurance. Some leases may exclude certain expenses.
Q2: How does this differ from residential calculations?
A: Commercial leases often use different measurement standards (e.g., rentable vs. usable square footage) and may include additional charges not found in residential leases.
Q3: What is a good price per square foot?
A: This varies significantly by location, property type, and market conditions. Research local comparable properties for benchmark rates.
Q4: Should I use annual or monthly calculations?
A: Commercial real estate typically uses annual rates for comparison, though monthly rates are also common in discussions.
Q5: Are there different types of square footage measurements?
A: Yes, commercial properties may use gross, rentable, or usable square footage. Ensure you're comparing consistent measurements.