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Price per Square Foot Formula:
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Price per square foot is a common metric used in commercial real estate to compare properties of different sizes. It represents the cost of one square foot of space and allows for standardized comparisons between properties.
The calculator uses the simple formula:
Where:
Explanation: This calculation provides a standardized way to compare property values regardless of their size differences.
Details: This metric is essential for commercial real estate investors, buyers, and appraisers to evaluate property value, compare different properties, and make informed investment decisions.
Tips: Enter the total price in your local currency and the area in square feet. Both values must be positive numbers greater than zero.
Q1: Why is price per square foot important in commercial real estate?
A: It provides a standardized metric to compare properties of different sizes and locations, helping investors make apples-to-apples comparisons.
Q2: What is a good price per square foot for commercial property?
A: This varies significantly by location, property type, and market conditions. Industrial spaces typically have lower prices per square foot than retail or office spaces.
Q3: Does this calculation include land value?
A: Yes, if you're calculating for a property sale that includes both building and land. For lease calculations, it would represent the cost per square foot of leased space.
Q4: How does price per square foot differ between property types?
A: Retail spaces typically command the highest price per square foot, followed by office spaces, with industrial properties generally having the lowest price per square foot.
Q5: Should I only consider price per square foot when evaluating a property?
A: No, while it's an important metric, you should also consider location, property condition, lease terms, market trends, and potential for appreciation.