1. What Is Price Per Square Foot Calculation?

Price per square foot calculation is a standard method used in commercial real estate to determine the cost efficiency of a lease space. It helps compare different properties and negotiate fair lease terms based on the usable area.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Lease Price — Total cost of the lease (in currency)
• Area — Total square footage of the leased space (in sq ft)

Explanation: This calculation provides a standardized metric to evaluate the cost efficiency of commercial space, allowing for easy comparison between different properties and lease options.

3. Importance of Price Per Square Foot Calculation

Details: Calculating price per square foot is essential for commercial tenants to assess the true value of a space, compare different leasing options, negotiate better terms, and make informed real estate decisions that align with their budget and space requirements.

4. Using the Calculator

Tips: Enter the total lease price in your local currency and the total area in square feet. Ensure both values are positive numbers for accurate calculation. The result will show the price per square foot, which you can use to compare with market rates.

5. Frequently Asked Questions (FAQ)

Q1: What is a good price per square foot for commercial space?
A: This varies significantly by location, property type, and market conditions. Typically ranges from $10-50/sq ft annually for office space, but prime locations can be much higher.

Q2: Does this include additional costs like CAM charges?
A: The basic calculation uses only the base lease price. For a complete comparison, you should also calculate the total occupancy cost including CAM, taxes, insurance, and other fees.

Q3: Should I use gross or net area for calculation?
A: Typically, price per square foot is calculated using the rentable square footage, which includes a proportionate share of common areas, not just the usable space.

Q4: How often should I recalculate this metric?
A: Recalculate when comparing new properties, during lease renewals, or when market conditions change significantly to ensure you're getting fair market value.

Q5: Can I use this for residential properties too?
A: While the concept is similar, residential pricing often includes different factors. This calculator is specifically designed for commercial lease analysis.