Commercial occupancy-cost guide
Turn gross and NNN proposals into comparable occupancy costs
A lower NNN base-rent quote can cost more after common-area maintenance, property taxes, insurance, utilities, and repair obligations. A full-service gross quote can also include expense stops, separately metered services, and exclusions.
Enter amounts from each proposal and lease abstract using the same rentable area and term. The year-by-year table shows which escalators drive the difference.
How to use this tool
Confirm rentable square feet
Use RSF rather than usable square feet and verify the building load factor.
Normalize the quote units
Convert every rent and operating-expense quote to dollars per square foot per year.
List tenant-paid items
Add utilities, CAM, taxes, insurance, repair duties, and gross-lease expense stops.
Match concessions and upfront work
Enter free base-rent months and tenant costs after improvement allowances.
Full-service gross does not always mean fixed
A gross lease may include an operating-expense base year or expense stop. When costs rise above that base, the tenant can owe a pass-through. Enter the estimated first-year charge and escalation instead of assuming zero.
NNN items to verify in the lease
- CAM definitions, exclusions, caps, and reconciliation rights
- Property-tax reassessments and insurance allocations
- Roof, structure, HVAC, parking, and capital-repair duties
- Administrative fees, gross-up clauses, and vacancy treatment
Commercial lease labels are not standardized, and actual responsibility comes from the lease. Ask a qualified commercial real-estate attorney and financial adviser to review expense definitions, caps, reconciliations, repair duties, assignment, renewal, and exit terms.
Frequently asked questions
What does $24/SF NNN mean?
It usually means $24 per rentable square foot per year for base rent, with CAM, property taxes, and building insurance charged separately. Confirm the quote convention in writing.
Does free rent eliminate NNN charges?
Often it abates base rent while operating expenses and utilities remain due. This calculator follows that conservative structure; adjust the proposal inputs if your concession is broader.
Why use present value?
Rent escalations push more cost into later years. Discounting future payments lets two schedules with different timing be compared in today’s dollars.