What will this space actually cost each month?

Multiply the rentable square feet by the annual rate per square foot, then divide by 12. A 2,400 square foot space quoted at $24 per square foot per year is 2,400 × $24 = $57,600 a year, or $4,800 a month in base rent. If the lease is net, add the NNN charges the same way: $8 per square foot per year on 2,400 square feet is another $1,600 a month, for $6,400 in total. If the rate is quoted per square foot per month, skip the division: 2,400 × $2.00 = $4,800 a month.

In most US markets it means $20 per square foot per year, so a 1,500 square foot space costs 1,500 × $20 = $30,000 a year, or $2,500 a month. In California and some retail markets, quotes are often per square foot per month instead, so $2.00 per square foot is the same space at $3,000 a month. Always confirm which one the listing means, and whether the rate is base rent only (NNN) or includes operating costs (gross or full service).

NNN (triple net) charges are the tenant's share of the property's real estate taxes, building insurance, and common-area maintenance, billed on top of base rent. They are quoted per square foot per year and estimated monthly, then reconciled against actual costs after year-end. They vary widely by property type, age, and local tax rates. Ask the landlord for the current year's estimate and the last two years of actual reconciled figures rather than relying on a listing number.

Net effective rent is the average base rent the landlord actually collects once concessions are taken out. Take the total base rent paid over the term (after free months), subtract the landlord's improvement allowance and any other cash concessions, then divide by the number of years and the square footage. It lets you compare two offers with different free rent and allowances on one number. Definitions vary: some brokers also subtract leasing commissions or discount the cash flows to present value. This calculator uses the simple, undiscounted version.

Not usually. Most free-rent clauses abate base rent only, and the tenant still pays NNN or CAM charges, taxes, and insurance during the free period. Some leases abate gross rent (everything), and some abate only half. This calculator treats free months as base rent only, which is the most common structure. Check the abatement clause for the words base rent versus rent or gross rent.

Most commercial leases raise base rent on each anniversary of the rent commencement date, by a fixed percentage (commonly 2% to 4%), a fixed dollar step per square foot, or by CPI. Percentage increases normally compound on the prior year's rent. This calculator applies one percentage increase at the start of each lease year and compounds it. For mixed or irregular steps, use the lease escalation calculator or enter the lease's rent table directly.

Usable square feet is the space a tenant actually occupies. Rentable square feet adds the tenant's share of common areas such as lobbies, corridors, and restrooms, so rentable is larger. The ratio between them is the load factor (or add-on factor): 2,000 usable square feet with a 15% load factor is 2,300 rentable square feet. Rent is almost always charged on rentable square feet, so use that number here.

Not necessarily. A gross or full-service rate includes some or all operating costs, so it is higher than a NNN rate for the same space. To compare them, add the NNN estimate to the NNN base rate and compare that total with the gross rate. The real difference is who carries the risk: under a NNN lease the tenant pays when taxes, insurance, or maintenance costs rise; under a gross lease the landlord does, usually with a base year or expense stop that passes increases above a set level back to the tenant.