# Calculate Commercial Rent

Negotiating rent for a commercial space can get quite complicated. A prospective business tenant knows its costs of doing business and its anticipated revenues, and the tenant will want to fit rent into its costs in such a way as to achieve a certain level of profit.

Calculating rent on a commercial property can be very time consuming depending on how complex the lease is and what type of tenant is occupying the property. Commercial and retail leases typically include a base rent with two additional rents possible. The additional rents are percentage rent and triple net rent.

All these new numbers need to be plugged in and the ROI recalculated, if the owner of a residential rental or commercial property pays these. Let’s look at the two primary methods to calculate ROI:.

Finally, when you sell appreciated rental real estate, you can structure the transaction as a 1031 Exchange One metric that commercial real estate lenders. is the debt service coverage ratio (DSCR).

Step 1: Calculate the base rent that is subject to the tax. Subtract all permissible deductions, including those allowed under the Commercial Revitalization Program from the gross rent paid.; Apply the rent reduction percentage (35%).

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Unlike homes, where the lease price is the same for all of the square footage in the home, commercial buildings calculate lease totals based on rentable square feet. Not only do tenants pay for.

Most commonly, commercial real estate is quoted in terms of "per square foot" (PSF). In a rental situation, the rate will either be Net or Gross numbers ("Net PSF" or "Gross PSF"). If a rent is quoted on a net basis, this number does not include the tenant’s pro-rated responsibility of taxes or common area [.]

The triple net, or NNN, lease used in commercial real estate rentals covers real estate taxes, insurance and maintenance. Payments are in addition to rent and utilities. Calculating a triple net lease is done by adding these costs and dividing it by the amount of square footage in the building.

As we’ve already noted courtesy of TheresaBradleyBanta, there are a number of ways to calculate. to net lease. Our product mix includes single stock (in depth) Equity REITs (small, mid and large.