{
  "id": "commercial-lease",
  "version": "cb6e5e0cfe5c",
  "status": "published",
  "name": "Commercial Lease Calculator",
  "question": "What will my commercial lease cost?",
  "summary": "Computes the monthly and total cost of a commercial lease from the rent per square foot, the area, triple net (NNN) charges and a yearly rent escalation, year by year.",
  "category": "finance",
  "subcategory": "mortgage-and-real-estate",
  "url": "https://www.acalculator.org/finance/commercial-lease-calculator",
  "markdown": "https://www.acalculator.org/finance/commercial-lease-calculator.md",
  "kind": "schedule",
  "method": "Base rent per square foot per year in year n = base rate × (12 if quoted monthly) × (1 + increase ÷ 100)^(n − 1); base rent = that × square feet; NNN charges = NNN rate × (12 if monthly) × square feet each year; monthly rent = (base rent + NNN) ÷ 12; total = Σ over the years.",
  "assumptions": [
    "The base rent rises by the same percent each year, compounding, from the first year’s rate; NNN charges stay at the rate you enter.",
    "Rent is not rounded year to year; the page rounds each amount to the cent for display only.",
    "Free rent months, tenant improvement allowances, percentage rent and the true-up of NNN estimates are not included."
  ],
  "inputs": {
    "$schema": "https://json-schema.org/draft/2020-12/schema",
    "type": "object",
    "properties": {
      "sqft": {
        "title": "Space (square feet)",
        "description": "The square feet you rent, as the lease measures them.",
        "type": "number",
        "minimum": 1,
        "maximum": 1000000000
      },
      "rate": {
        "title": "Base rent per square foot",
        "description": "The quoted base rent for each square foot, per year or per month as set below.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000
      },
      "per": {
        "title": "Rates are quoted",
        "description": "Whether the rates per square foot are per year or per month.",
        "type": "string",
        "enum": [
          "year",
          "month"
        ]
      },
      "nnn": {
        "title": "NNN charges per square foot",
        "description": "Optional: your share of property taxes, insurance and maintenance (CAM), per square foot, same period.",
        "type": "number",
        "x-unit": "USD",
        "minimum": 0,
        "maximum": 1000000
      },
      "esc": {
        "title": "Yearly rent increase",
        "description": "Optional: the percent the base rent rises each year of the lease.",
        "type": "number",
        "x-unit": "percent",
        "minimum": 0,
        "maximum": 100
      },
      "years": {
        "title": "Lease term (years)",
        "description": "How many years the lease runs, from 1 to 50.",
        "type": "integer",
        "minimum": 1,
        "maximum": 50
      }
    }
  },
  "outputs": {
    "monthly": {
      "label": "Monthly rent, year 1",
      "description": "Base rent + NNN charges per month in the first year.",
      "format": "money"
    },
    "baseMonthly": {
      "label": "Base rent per month, year 1",
      "description": "Base rent per square foot per year × square feet ÷ 12.",
      "format": "money"
    },
    "nnnMonthly": {
      "label": "NNN charges per month",
      "description": "NNN per square foot per year × square feet ÷ 12. Shown when you enter NNN charges.",
      "format": "money"
    },
    "annual": {
      "label": "Rent for year 1",
      "description": "Base rent + NNN charges for the first year.",
      "format": "money"
    },
    "lastMonthly": {
      "label": "Monthly rent, last year",
      "description": "Base rent + NNN charges per month in the last year of the lease.",
      "format": "money"
    },
    "total": {
      "label": "Total over the lease",
      "description": "Every year’s base rent and NNN charges added up.",
      "format": "money"
    },
    "average": {
      "label": "Average per month",
      "description": "Total over the lease ÷ (12 × years).",
      "format": "money"
    }
  },
  "defaultAnswer": {
    "inputs": {
      "sqft": 2000,
      "rate": 24,
      "per": "year",
      "nnn": 6,
      "esc": 3,
      "years": 5
    },
    "outputs": {
      "monthly": 5000,
      "baseMonthly": 4000,
      "nnnMonthly": 1000,
      "annual": 60000,
      "lastMonthly": 5502.03524,
      "total": 314838.51888,
      "average": 5247.308648
    },
    "text": "The lease costs $5,000.00 a month in the first year and $314,838.52 over 5 years."
  },
  "examples": [
    {
      "given": {
        "sqft": 2000,
        "rate": 24,
        "per": "year",
        "nnn": 6,
        "esc": 3,
        "years": 5
      },
      "expect": {
        "monthly": 5000,
        "baseMonthly": 4000,
        "nnnMonthly": 1000,
        "annual": 60000,
        "lastMonthly": 5502.03524,
        "total": 314838.51888,
        "average": 5247.308648
      },
      "source": "Federal Economic Development Agency for Southern Ontario, Small Business Services, \"Understanding your business lease\" (commercial rents are generally measured by the cost per square foot; net, net-net and triple net leases pass taxes, insurance and operating costs to the tenant; escalation clauses raise rent regularly over the lease). https://sbs-spe.feddevontario.canada.ca/index.php/en/understanding-your-business-lease; hand calculation in content.mdx: 24 × 2,000 ÷ 12 = 4,000 and 6 × 2,000 ÷ 12 = 1,000; year 5 base 48,000 × 1.03⁴ = 54,024.42288, so (54,024.42288 + 12,000) ÷ 12 = 5,502.03524; total 48,000 × (1 + 1.03 + 1.03² + 1.03³ + 1.03⁴) + 5 × 12,000 = 314,838.51888"
    },
    {
      "given": {
        "sqft": 1500,
        "rate": 2.5,
        "per": "month",
        "years": 3
      },
      "expect": {
        "monthly": 3750,
        "annual": 45000,
        "total": 135000,
        "lastMonthly": 3750
      },
      "source": "Federal Economic Development Agency for Southern Ontario, Small Business Services, \"Understanding your business lease\" (commercial rents are generally measured by the cost per square foot; net, net-net and triple net leases pass taxes, insurance and operating costs to the tenant; escalation clauses raise rent regularly over the lease). https://sbs-spe.feddevontario.canada.ca/index.php/en/understanding-your-business-lease; hand calculation in content.mdx: 2.50 × 1,500 = 3,750 a month; × 12 × 3 = 135,000"
    },
    {
      "given": {
        "sqft": 3200,
        "rate": 18.75,
        "per": "year",
        "nnn": 4.25,
        "esc": 2.5,
        "years": 2
      },
      "expect": {
        "monthly": 6133.333333333333,
        "annual": 73600,
        "lastMonthly": 6258.333333333333,
        "total": 148700
      },
      "source": "Federal Economic Development Agency for Southern Ontario, Small Business Services, \"Understanding your business lease\" (commercial rents are generally measured by the cost per square foot; net, net-net and triple net leases pass taxes, insurance and operating costs to the tenant; escalation clauses raise rent regularly over the lease). https://sbs-spe.feddevontario.canada.ca/index.php/en/understanding-your-business-lease; hand calculation in content.mdx: (18.75 + 4.25) × 3,200 = 73,600 in year 1; year 2: 18.75 × 1.025 × 3,200 + 13,600 = 75,100; total 148,700"
    }
  ],
  "sources": [
    "Federal Economic Development Agency for Southern Ontario, Small Business Services, \"Understanding your business lease\": commercial rents are generally measured by the cost per square foot of the space; a net lease adds real estate taxes to the base rent, a net-net lease adds insurance too, and a triple net lease passes on all the costs of operating the building; escalation clauses include regular increases in rent, pro-rated increases in taxes and other direct costs, and increases tied to the Consumer Price Index; landlords do not all measure square footage in the same way, and part of the rent pays for public space such as lobbies, hallways and bathrooms. https://sbs-spe.feddevontario.canada.ca/index.php/en/understanding-your-business-lease (retrieved 2026-10-19, read in a browser)"
  ],
  "related": [
    "rent",
    "price-per-square-foot",
    "cap-rate",
    "commercial-mortgage"
  ],
  "changelog": []
}