Two views of the same commercial lease scenario
The tenant view reports contract rent and occupancy cost: base rent after the initial free-rent concession plus CAM, property-tax, and insurance reimbursements. The landlord view treats those NNN reimbursements as pass-throughs that exactly offset matching expenses, then reports net base cash after TI, commission, and other upfront costs.
Because the two results answer different questions, tenant occupancy cost is not labeled landlord profit. Likewise, landlord net cash is not the tenant invoice total. The assumptions remain visible so a lease quote, abstract, or negotiation scenario can be reconstructed without hiding concessions inside one blended rate.
Monthly versus annual base-rent quotes
The frequency selector is an explicit numeric adapter: 0 means the base-rent quote is annual per area and 1 means it is monthly per area. The calculator converts either convention into initial monthly and annual base rent before building the schedule. This avoids silently assuming the unit convention used in a listing or broker proposal.
Base rent grows by the entered percentage on each 12-month lease anniversary. The same rate repeats for each complete lease year and does not affect CAM, tax, or insurance. Irregular step rents, midyear changes, index-linked adjustments, and partial years require a dated lease schedule outside this model.
NNN charges and initial free base rent
CAM, property tax, and insurance are entered as separate annual per-area amounts, then added across the full term without escalation. Their sum is the additional-rent result. Actual triple-net charges may be estimated, reconciled, grossed up, capped, audited, or allocated differently, so use figures that match the stated lease assumptions.
Free-rent months apply only at the beginning and waive scheduled base rent for those months. They are capped at the lease term. The model continues charging all three NNN reimbursements during free-base-rent months; if the actual concession also waives additional rent, this calculator does not represent that clause.
TI, commission, and landlord effective rent
Tenant improvement allowance, leasing commission, and other landlord upfront costs are summed and deducted once from base rent after concessions. They are not deducted from tenant occupancy cost because they are modeled as landlord cash outlays rather than recurring tenant invoices. Their actual payment dates, amortization, reimbursement rules, and tax treatment are excluded.
Effective annual rent per area divides landlord net cash by area and lease years. It is therefore a landlord-side nominal average after free base rent and entered upfront costs, with NNN pass-throughs excluded as zero-net reimbursements. It is not discounted present value; zero area produces no per-area result.
Reading contract rent and model limits
Contract rent equals escalated base rent after the initial concession plus flat additional rent. Scheduled base rent and rent concessions are shown separately, so the user can see the gross schedule and the waiver rather than only the net total. Initial annual base rent provides a check on the quote-frequency conversion.
The calculator is not a legal lease abstract. It excludes percentage rent, utilities, taxes outside the entered reimbursement, reconciliation mechanics, deposits, credit loss, options, early termination, discounting, and income-tax effects. Compare the results with executed clauses and a dated payment schedule before valuation or negotiation.
Commercial Lease Calculator FAQ
How do I choose monthly or annual base rent?
Set base-rent frequency to 0 for an annual per-area quote or 1 for a monthly per-area quote. The calculator converts the selected convention before building the schedule.
Does escalation apply to CAM, taxes, and insurance?
No. Escalation applies to base rent at each 12-month anniversary. The three additional-rent inputs stay flat for the modeled term.
Does free rent waive NNN charges?
No. Initial free months waive base rent only. CAM, property-tax, and insurance reimbursements remain in tenant occupancy cost throughout the term.
Why is landlord net cash lower than contract rent?
Contract rent includes NNN reimbursements. Landlord net cash assumes those reimbursements offset matching expenses, excludes them from net economics, and deducts TI, commission, and other upfront costs from base rent after concessions.
What does effective annual rent per area represent?
It is landlord net base cash after the modeled concession and upfront costs, divided by area and lease years. It is a nominal average, not discounted present value or tenant occupancy cost.
Continue the property analysis
Compare this result with adjacent metrics, keeping each formula’s income, expense, and financing scope consistent.