A commercial lease is rarely priced at the number on the sign. A space advertised at "$30 per square foot" can easily cost $39 per square foot once operating expenses are added on top, and over a 2,000 square foot office that gap is $18,000 a year — enough to hire a part-time employee or fund a marketing campaign. This commercial lease calculator separates the base rent from the triple-net (NNN) charges so you can see the true monthly and annual occupancy cost before you sign a letter of intent.
Type in the rentable square feet and the three per-square-foot rates — base rent, CAM, and taxes & insurance — and the calculator instantly breaks your cost into a monthly base-rent line, a monthly NNN line, a total annual occupancy cost, and an effective rent per square foot.
How to Use
- Enter the Rentable Square Feet of the space you are considering. Use the landlord's rentable figure, not your own tape measure — landlords calculate rentable area with a BOMA formula that includes a share of common areas.
- Set the Base Rent to the quoted annual rate per square foot. In most US markets this is stated as dollars per square foot per year, not per month.
- Add the CAM Charges — common area maintenance such as parking lot sweeping, landscaping, snow removal, and property management fees. If the listing only shows an "estimated NNN" figure, split out CAM roughly half of it.
- Add Taxes & Insurance — your pro-rata share of the building's property taxes and casualty insurance under a triple-net lease. If the listing bundles everything into one "NNN" number, put the combined NNN estimate in CAM and leave taxes at zero, or split it however your broker describes the deal.
- Read the result card. The Monthly Base Rent is the fixed number your landlord quotes; the Monthly NNN Charges fluctuate; together they are your Total Monthly Occupancy Cost.
- Compare the Effective Rent ($/sq ft/yr) against competing spaces. Two buildings quoted at the same base rent can have a very different true cost once NNN is included.
The NNN Lease Formula
Under a triple-net (NNN) lease — the dominant structure for retail, industrial, and most office space in the United States — the tenant pays the base rent plus its pro-rata share of operating expenses. The math is deliberately simple:
Annual base rent = square feet × base rent per square foot
Annual NNN charges = square feet × (CAM per square foot + taxes & insurance per square foot)
Total annual occupancy cost = annual base rent + annual NNN charges
Divide the annual totals by 12 to get the monthly numbers. On a 2,000 square foot suite at $30 base with $5 CAM and $4 taxes & insurance, the math is: base rent = 2,000 × $30 = $60,000/year ($5,000/month); NNN = 2,000 × $9 = $18,000/year ($1,500/month); total occupancy = $78,000/year, or $6,500/month. The effective rent — the number you should actually compare between buildings — is $78,000 ÷ 2,000 = $39 per square foot per year, not the advertised $30.
Gross vs Net Leases: Know What You Are Comparing
Not every commercial lease works this way. The three common structures are:
- Gross lease — the landlord pays all operating expenses; your single rent check covers everything. Common in high-rise downtown office towers.
- Modified gross lease — you split expenses, usually with the tenant paying utilities and janitorial while the landlord covers taxes and insurance.
- Triple-net (NNN) lease — you pay base rent plus CAM, property taxes, and insurance separately. Dominant in suburban office, retail, and industrial.
A building quoted at $36 gross is often cheaper than one quoted at $30 NNN plus $9 of expenses — yet brokers frequently advertise the NNN number alone, because it looks lower. Always convert competing quotes to the same basis (effective cost per square foot) before comparing.
Examples
Example 1 — The default 2,000 sq ft office. A growing business leases a 2,000 square foot suburban office at $30/sq ft base, with $5/sq ft CAM and $4/sq ft taxes & insurance. Annual base rent is $60,000; annual NNN is $18,000; total occupancy is $78,000 per year, or $6,500 per month. The landlord's flyer advertised "$30/sq ft," but the business actually pays $39/sq ft.
Example 2 — Comparing two retail spaces. Space A is quoted at $42/sq ft base gross (no additional expenses) for 1,500 sq ft. Space B is quoted at $30/sq ft base NNN, with $11/sq ft of CAM, taxes and insurance. Space A costs 1,500 × $42 = $63,000/year. Space B costs 1,500 × $41 = $61,500/year. Despite the eye-catching "$30" headline, the two are nearly identical in true cost — and NNN can rise each year, while gross is more predictable.
Example 3 — A large industrial warehouse. A logistics company takes 2,000,000 square feet of warehouse space at $12/sq ft base with $3/sq ft NNN. Base rent is $24,000,000/year; NNN is $6,000,000/year; total occupancy is $30,000,000 per year, or $2,500,000 per month. At that scale, negotiating a 50-cent reduction in NNN saves a million and a half dollars annually.
FAQ
What does NNN mean in a commercial lease?
NNN stands for "triple net": the tenant pays three pass-through expense categories on top of base rent — common area maintenance (CAM), property taxes, and building insurance. The landlord typically pays the mortgage and structural costs. NNN charges are estimated up front as a per-square-foot figure, then true-up at year-end against actual expenses.
Is the quoted rent per square foot per year or per month?
Almost always per year in the United States. A "$30/sq ft" office means $30 per square foot per year, so a 2,000 sq ft space costs $60,000 a year, or $5,000 a month before NNN. If a quote looks extraordinarily low, confirm whether it is monthly (rare) or annual (standard).
How do I convert base rent into a monthly payment?
Multiply the rentable square feet by the per-square-foot annual rate to get the annual base rent, then divide by 12. For a 2,000 sq ft space at $30/sq ft: 2,000 × $30 = $60,000 per year ÷ 12 = $5,000 per month. Add your monthly NNN estimate to get the full monthly check.
What is included in CAM charges?
CAM (Common Area Maintenance) typically covers parking lot maintenance and repairs, landscaping, snow removal, janitorial of shared restrooms, security, trash removal, and property management fees. In retail centers it often includes shared marketing fund contributions. It excludes the tenant's own interior utilities, janitorial, and repairs.
How much should I budget for NNN expenses?
NNN usually adds $4 to $12 per square foot per year for suburban office and retail, and $2 to $6 per square foot for modern industrial space, though high-tax markets like California and New Jersey can run higher. Ask the landlord for last year's actual reconciled operating expenses — the estimate on the listing is almost always lower than the true bill.
What is effective rent and why does it matter?
Effective rent is your total annual occupancy cost divided by the rentable square feet, including NNN. Two buildings can advertise the same $30/sq ft base but have very different effective rents once expenses differ. Comparing effective rent per square foot — not the advertised base — is the only apples-to-apples way to evaluate competing commercial spaces.
Disclaimer
This commercial lease calculator is provided for informational purposes only and does not constitute legal, real estate, or tax advice. Figures are estimates based on the inputs you enter; actual NNN charges, reconciliations, CAM audits, tax pass-throughs, and insurance costs vary by building, market, lease structure, and landlord. Always review your proposed lease agreement with a licensed commercial real estate attorney or broker before committing to a tenancy.