A commercial lease calculator helps tenants and landlords understand the true total occupancy cost of a commercial space. Whether you are evaluating a NNN (triple net), gross, or modified gross lease, knowing your all-in cost per square foot — including escalations, tenant improvements, and free rent — is essential for making informed leasing decisions.
Lease Details
Operating Expenses (per SF/year)
Lease Terms
How to Use the Commercial Lease Calculator
Evaluating a commercial lease involves far more than just the quoted rent per square foot. Between operating expenses, annual escalations, tenant improvement allowances, and free rent periods, two seemingly similar lease offers can differ dramatically in total cost. This calculator helps you see the full picture before signing.
Step 1: Select Your Lease Type
Choose between NNN (triple net), gross, or modified gross. In a NNN lease, you pay base rent plus property taxes, insurance, and common area maintenance (CAM) separately. A gross lease rolls everything into one flat rate. A modified gross lease lets you specify exactly which expenses you are responsible for. The calculator adjusts its inputs based on your selection.
Step 2: Enter Space and Rent Details
Enter the total square footage of the space and the base rent per square foot per year. For NNN or modified gross leases, also enter the per-SF costs for property taxes, insurance, and CAM. These figures are typically provided in the lease proposal or letter of intent (LOI). If you are unsure, ask your broker for the current year's operating expense estimates.
Step 3: Set Lease Terms and Concessions
Enter the lease term in years, the annual rent escalation percentage (typically 2-4%), any tenant improvement (TI) allowance per square foot offered by the landlord, and the number of free rent months. These concessions significantly impact your effective rent and total lease cost. A longer lease term with higher TI and free rent can make a higher base rent more competitive than a lower rate with no concessions.
Step 4: Review Your Results
After clicking Calculate, you will see your monthly and annual total occupancy cost, effective rent per square foot (adjusted for TI and free rent), and the total cost over the full lease term. The year-by-year projection shows how escalations compound over time. If you entered a NNN lease, the equivalent gross rent figure tells you what a single all-inclusive rate would be, making it easy to compare against gross lease proposals. Use the cost breakdown bars to understand where your money goes each year.
Comparing Multiple Lease Offers
The most valuable use of this commercial lease calculator is comparing competing offers. Run each proposal through the calculator and compare the effective rent per SF and total lease cost. A space with a lower base rent but high operating expenses may actually cost more than a higher-base-rent gross lease. The effective rent calculation normalizes everything so you can make an apples-to-apples comparison.
FAQ
Is this commercial lease calculator free?
Yes, this commercial lease calculator is completely free with no signup, no hidden fees, and no usage limits. All calculations run locally in your browser, so your lease details remain completely private.
Is my financial data safe?
Absolutely. All calculations run entirely in your browser using client-side JavaScript. Your lease terms, rental rates, and financial figures are never sent to any server or stored anywhere. You can disconnect from the internet and the calculator will continue working.
What is the difference between NNN, gross, and modified gross leases?
In a NNN (triple net) lease, the tenant pays base rent plus property taxes, insurance, and common area maintenance (CAM) separately. In a gross lease, the landlord bundles all expenses into one flat rate. A modified gross lease falls in between, where the tenant pays base rent plus some specific expenses agreed upon in the lease.
What is the effective rent per square foot?
Effective rent per square foot accounts for tenant improvement (TI) allowances and free rent months that reduce your actual cost. It spreads the total net cost over the lease term and divides by the square footage, giving you the true per-SF cost to compare different lease offers on equal footing.
How does annual rent escalation work in commercial leases?
Annual rent escalation is a fixed percentage increase applied to the base rent each year. A typical escalation is 2-4% per year. For example, with 3% escalation on a $30/SF base rent, year two becomes $30.90/SF, year three becomes $31.83/SF, and so on. This calculator shows the cumulative effect over the full lease term.
What is a tenant improvement (TI) allowance?
A tenant improvement allowance is a per-square-foot dollar amount the landlord contributes toward building out or customizing the space for the tenant. For example, a $25/SF TI allowance on a 5,000 SF space means the landlord provides $125,000 toward renovations, effectively reducing your total lease cost.
How do free rent months affect my total lease cost?
Free rent months, also called rent abatement, are months at the beginning of the lease where no base rent is charged. This reduces your total lease cost and lowers the effective rent per square foot. The calculator spreads this benefit across the full lease term when computing effective rent.
How do I compare NNN and gross lease offers?
This calculator shows the equivalent gross rent for NNN leases by adding base rent and all operating expenses together. To compare, enter your NNN lease details to see the total occupancy cost, then compare that total per-SF figure to any gross lease quotes you have received. The lower effective rent per SF is the better deal.