The short answer Commercial rent is usually quoted per square foot per year. Monthly rent = annual rate × square feet ÷ 12. On a NNN lease, add the estimated NNN charges per square foot before you multiply.
A 3,000 SF space quoted at $15.00/SF NNN, with estimated NNN charges of $5.00/SF per year.
Base rent: $15.00 × 3,000 = $45,000 per year ÷ 12 = $3,750.00 per month.
NNN charges: $5.00 × 3,000 = $15,000 per year ÷ 12 = $1,250.00 per month.
All-in: ($15.00 + $5.00) × 3,000 ÷ 12 = $5,000.00 per month, before utilities.
How do I convert an annual rate to monthly rent?
Multiply the annual rate by the square footage to get annual rent, then divide by 12. A few listings quote monthly rates instead, so if a number looks far too low, confirm whether it is per month or per year.
How do I add NNN charges?
On a NNN lease, base rent is only part of the cost. The landlord estimates taxes, insurance and common area maintenance per square foot, and bills your pro rata share monthly. Add that estimate to the base rate, as in the example above.
How do rent escalations change the math?
Most leases raise the base rate each year. With a fixed 3% annual increase, each year's rate is the prior year's rate × 1.03. Many leases round to the cent; check yours.
| Lease year | Rate ($/SF/yr) | Annual base rent (3,000 SF) | Monthly base rent |
|---|---|---|---|
| Year 1 | $15.00 | $45,000.00 | $3,750.00 |
| Year 2 | $15.00 × 1.03 = $15.45 | $46,350.00 | $3,862.50 |
| Year 3 | $15.45 × 1.03 = $15.9135, rounded to $15.91 | $47,730.00 | $3,977.50 |
Three-year base rent: $45,000 + $46,350 + $47,730 = $139,080. NNN charges are billed on top and change with actual costs.
What is the difference between rentable and usable square feet?
Usable square feet (USF) is the space you occupy. Rentable square feet (RSF) adds your share of common areas such as lobbies, corridors and shared restrooms. The ratio RSF ÷ USF is the load factor. It matters most in multi-tenant office buildings; many single-entry flex units have little or no shared interior space. Ask how the space was measured.
A suite has 2,000 USF and a 1.15 load factor: 2,000 × 1.15 = 2,300 RSF. At $24.00/SF per year: $24.00 × 2,300 = $55,200 per year ÷ 12 = $4,600.00 per month. Per usable square foot, that is $55,200 ÷ 2,000 = $27.60/SF.
How this affects your lease
- Compare spaces on all-in monthly cost, not the headline rate.
- Model rent through the last year of the term, not just year one.
- On office space, compare cost per usable square foot when load factors differ.
- Ask for free rent and a TI allowance in the same comparison; both change the real cost.
Rates vary by property and change quarterly. To see current options, browse flex space for lease or ask Goff CRE Group, brokered by Nassar Realty, for comps through our tenant representation service.
