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Price Per Square Foot Formula:
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Price Per Square Foot (PPSF) is a common metric used in commercial real estate to compare property values and assess the cost efficiency of space. It's calculated by dividing the total cost of a property by its total square footage.
The calculator uses the PPSF formula:
Where:
Explanation: This simple calculation provides a standardized way to compare commercial property prices regardless of size differences.
Details: PPSF is crucial for commercial real estate investors, appraisers, and buyers to evaluate property value, compare similar properties, and make informed investment decisions.
Tips: Enter the total property cost in your local currency and the total square footage. Both values must be greater than zero for accurate calculation.
Q1: Why is PPSF important in commercial real estate?
A: PPSF allows for standardized comparison of properties of different sizes, helping investors identify value and make informed purchasing decisions.
Q2: What is a typical PPSF range for commercial properties?
A: PPSF varies significantly by location, property type, and market conditions. Office spaces, retail locations, and industrial properties all have different typical PPSF values.
Q3: Does PPSF include land value in commercial calculations?
A: Typically, commercial PPSF calculations include both building and land value, unlike some residential calculations that may separate them.
Q4: How does location affect commercial PPSF?
A: Location is one of the most significant factors affecting PPSF, with prime commercial locations commanding substantially higher prices per square foot.
Q5: Should PPSF be the only factor when evaluating commercial property?
A: No, while PPSF is an important metric, other factors like property condition, lease terms, tenant quality, and potential for appreciation should also be considered.