1. What is Price Per Square Foot Calculation?

Price per square foot is a standard metric used in commercial real estate to compare property values and assess the cost efficiency of space. It helps investors, buyers, and tenants evaluate the relative value of different properties.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Total Price — The complete purchase price or rental cost of the commercial property
• Area — The total square footage of the commercial space

Explanation: This calculation provides a standardized way to compare properties of different sizes by normalizing the cost to a per-square-foot basis.

3. Importance of Price Per Square Foot Calculation

Details: This metric is crucial for commercial real estate analysis, investment decisions, lease negotiations, and property valuation. It allows for apples-to-apples comparisons between properties of varying sizes and helps identify market trends and property value benchmarks.

4. Using the Calculator

Tips: Enter the total price in your local currency and the area in square feet. Ensure both values are positive numbers. The calculator will automatically compute the price per square foot for easy comparison and analysis.

5. Frequently Asked Questions (FAQ)

Q1: Why is price per square foot important in commercial real estate?
A: It provides a standardized metric for comparing properties of different sizes, locations, and types, helping investors and tenants make informed decisions about value and market positioning.

Q2: What's a typical price per square foot for commercial properties?
A: This varies significantly by location, property type (office, retail, industrial), and market conditions. Always compare with local market data for accurate benchmarking.

Q3: Does this calculation work for both purchase and rental prices?
A: Yes, the same formula applies to both purchase prices (price per sq ft) and rental rates (rent per sq ft), though rental rates are typically quoted annually.

Q4: Should I include common areas in the square footage calculation?
A: For commercial properties, square footage typically includes usable space. Be consistent in whether you're using gross leasable area (GLA) or net leasable area (NLA) when making comparisons.

Q5: How does location affect price per square foot?
A: Location is one of the most significant factors. Prime locations with high demand typically command much higher prices per square foot than secondary or tertiary markets.