1. What is Price per Square Foot?

The price per square foot is a standard metric in commercial real estate that allows for comparison of rental rates across properties of different sizes. It's calculated by dividing the total annual rent by the total square footage of the leased space.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Total Rent — Annual rent amount in dollars
• Square Footage — Total area of the leased space in square feet

Explanation: This calculation standardizes rental rates to allow apples-to-apples comparisons between properties of different sizes.

3. Importance of Price per Square Foot

Details: This metric is crucial for commercial tenants to evaluate lease offers, compare locations, and budget for space costs. It's also used by landlords to set competitive rental rates.

4. Using the Calculator

Tips: Enter the total annual rent amount (in dollars) and the total square footage of the space. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I use annual or monthly rent?
A: Commercial leases typically quote annual rates, so use the annual rent amount for this calculation.

Q2: What's a good price per square foot?
A: This varies dramatically by location, property type, and market conditions. Compare with similar properties in your area.

Q3: Does this include operating expenses?
A: This calculates base rent only. Many commercial leases have additional charges for taxes, insurance, and maintenance (CAM charges).

Q4: How does this differ from residential calculations?
A: Residential often uses monthly rates, while commercial typically uses annual rates. The concept is similar but the time period differs.

Q5: Should I calculate this for the entire lease term?
A: For multi-year leases with rent escalations, calculate this annually as the rate may change over time.