Net Effective Rent Calculator
Calculate the true cost of renting by factoring in lease concessions, free months, and tenant improvements. This calculator helps you compare different lease offers and understand the actual cost per square foot.
Net Effective Rent
Cost Analysis
Lease Comparison
Understanding Net Effective Rent
Net effective rent represents the true cost of leasing commercial or residential space after accounting for all concessions, free rent periods, and tenant improvement allowances. This calculation helps you compare different lease offers on an apples-to-apples basis.
Common Lease Concessions
- Free Rent Periods: Months where no rent is charged, often at the beginning of the lease
- Rent Abatement: Reduction in rent for specific periods or throughout the lease term
- Tenant Improvements: Landlord-funded renovations or build-outs
- Moving Allowances: Reimbursement for moving expenses
- Broker Fee Contributions: Landlord pays part or all of the broker commission
Why Net Effective Rent Matters
Face rent (the stated monthly rent) doesn't tell the whole story. Landlords often offer concessions to make their space more competitive. Understanding the net effective rent helps you:
- Compare different lease offers accurately
- Negotiate better terms with landlords
- Calculate the true cost of occupancy
- Determine if concessions are worth the effort
Calculation Methodology
The calculator amortizes all concessions over the lease term and factors in rent escalations. This provides a comprehensive view of the total cost of occupancy, including both recurring rent payments and one-time costs.
Tip: Always ask for the landlord's net effective rent calculation when comparing spaces. Different landlords may structure concessions differently, so getting the numbers in writing is crucial for accurate comparisons.