1. What is Lease Cost Per Square Foot?

Lease Cost Per Square Foot (LCPSF) is a commercial real estate metric that calculates the cost of leasing space per unit area. It's used to compare rental rates across different properties and locations.

2. How Does the Calculator Work?

The calculator uses the LCPSF formula:

Where:

• \( LC \) — Total lease cost (currency)
• \( SF \) — Total square footage (ft²)

Explanation: This simple division gives you the cost per square foot, allowing for easy comparison of leasing options.

3. Importance of LCPSF Calculation

Details: LCPSF is essential for commercial tenants to evaluate leasing options, budget accurately, and negotiate favorable lease terms. It's also used by property owners to set competitive rental rates.

4. Using the Calculator

Tips: Enter the total lease cost in your local currency and the total square footage of the leased space. Both values must be greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What's included in the lease cost?
A: Typically includes base rent, common area maintenance (CAM) charges, property taxes, and insurance. Some calculations may exclude certain variable costs.

Q2: How does LCPSF vary by location?
A: LCPSF can vary significantly based on location, property type, building class, and market conditions. Prime locations typically command higher rates.

Q3: Should I use gross or net square footage?
A: Typically, usable square footage is used, but some markets calculate based on rentable square footage which includes a portion of common areas.

Q4: How often should LCPSF be calculated?
A: It should be calculated when comparing new lease options, during lease renewals, and when conducting regular financial reviews.

Q5: Are there industry standards for LCPSF?
A: While there are no universal standards, commercial real estate associations often publish benchmark data for different markets and property types.