A commercial rent quote rarely tells you the monthly amount you will actually pay. It usually gives a rate per square foot, a lease type, and an estimate of extra charges. This guide shows how to turn that into a monthly and a five-year budget, and then how to compare two quotes fairly. You can follow along with our calculator.
Commercial rents are commonly written as dollars per square foot per year, but some listings use dollars per square foot per month. Before anything else, confirm which one you have. To convert monthly to yearly, multiply by 12. A rate of $2.40 per square foot per month is $28.80 per square foot per year. If you skip this step, a quote can look 12 times cheaper or more expensive than it is.
Ask the listing agent for a written list of the expenses the tenant pays. Under a net (NNN) lease, legal references such as the Cornell Law School Legal Information Institute describe the tenant as paying base rent plus property taxes, insurance, and common area maintenance. Under a gross lease, the landlord pays those and the tenant pays one all-inclusive rent. A modified gross lease falls between the two and has no standard definition, so get the split in writing. Our lease structure guide explains each type.
Add base rent and the expense estimate, both per square foot per year. For a full-service gross quote there is nothing to add, but confirm what is left out, such as utilities for your own suite or janitorial.
Take the all-in rate, multiply by the square footage, and divide by 12. Add any separate monthly costs you expect to pay, such as utilities. That is your year-1 monthly cost.
Quote A is NNN at $18.00 per square foot per year base rent with estimated expenses of $6.25 per square foot per year. The all-in rate is $24.25 per square foot per year. Times 3,000 square feet: $72,750 a year, or $6,062.50 a month. Add $450 a month for utilities and janitorial you pay yourself and the monthly figure is $6,512.50.
Quote B is modified gross at $2.40 per square foot per month for the same 3,000 square feet. Converted, that is $28.80 per square foot per year, $86,400 a year, or $7,200 a month. Adding the same $450 gives $7,650 a month.
On these assumptions, Quote A is $1,137.50 cheaper per month in year 1 ($7,650 minus $6,512.50). But Quote A has estimated expenses that will be reconciled, and Quote B may carry its own escalation clause. If both rents rise 3% a year on the base portion only and the term is five years, Quote A totals about $407,443 and Quote B (with its whole rent as base) about $485,709. The point is not which one wins; it is that the comparison only becomes visible after you convert both to the same basis. The figures are illustrations, not market rents.
If the lease runs several years, find the rent schedule. A fixed yearly increase is easy to model. Index-linked increases are harder, so ask what cap or floor applies. The calculator applies your percentage to base rent only, so if your lease also lets expenses rise, treat its total as a floor.
Security deposit, build-out costs, moving, signage, and any free-rent period change what you pay in the first year. They are not in the calculator. Write them next to your estimate so the comparison with another space is complete.
The most frequent mistakes are mixing monthly and yearly rates, comparing base rents without expenses, and treating an estimate as a fixed price. A close second is comparing quotes measured on different bases; see rentable vs. usable square feet. For the expense side, read how CAM reconciliation works.
Landlords price the same building in different ways. One may quote a low base rent and pass most costs to the tenant. Another may quote a higher rent that includes them. A third may reduce the headline rate in exchange for a longer term or smaller tenant improvements. When you reduce each offer to a single all-in number per square foot per year, then add the term and the increases, you can compare offers that look unrelated. When two offers are close, the difference often comes down to risk: a fixed all-in number is predictable, while an estimate that is reconciled later can move. Decide how much uncertainty your cash flow can absorb, and ask for the history of actual expenses so you can judge how reliable the estimate is.