Commercial lease analyzer

Estimates only. Commercial lease structures vary widely. CAM reconciliation, escalation clauses, and pass-through caps require review of the actual lease language. A commercial real estate attorney confirms your specific lease terms. See our full disclaimer.

Commercial lease cost calculator

Lease structure

Lease type

Rentable square footage

Base rent

Base rent ($ per sq ft, annual) The quoted "asking rate" - this is the starting point, not the full cost.

Annual rent escalation (%) Typical commercial escalations run 2% to 4% per year.

Pass-through expenses (NNN charges)

Enter annual cost per square foot for each category. Ask the landlord for the prior year's actual CAM reconciliation, not just the estimate.

CAM (common area maintenance) ($/sq ft)

Property taxes ($/sq ft)

Building insurance ($/sq ft)

Utilities not separately metered ($/sq ft)

One-time and additional costs

Tenant improvement (TI) allowance ($/sq ft, if any) Landlord-funded buildout credit. Reduces your effective cost.

Free rent period (months) Common as a concession during lease-up. Reduces effective annual cost.

Lease term (years)

Broker commission (% of total lease value, if you're paying it) Usually paid by landlord. Leave at 0 if not applicable to you.

Your commercial lease cost breakdown

Get a commercial real estate attorney review

A commercial real estate attorney reviews CAM reconciliation rights, escalation caps, exclusivity clauses, and assignment/subletting terms before you sign. Commercial leases are far less standardized than residential leases - every clause is negotiable.

What's the difference between gross, modified gross, and NNN leases?

A full-service gross lease includes most operating expenses in the quoted rent. You pay 1 number and the landlord covers taxes, insurance, and common area maintenance. These are common in office space.

A modified gross lease splits the difference. Some expenses are included in base rent, others are passed through to the tenant - commonly utilities or increases above a base year amount. Read the lease carefully to identify exactly which expenses fall on you.

A triple net (NNN) lease passes through all 3 major operating expense categories - taxes, insurance, and common area maintenance - on top of base rent. NNN is the most common structure for retail and industrial space. The quoted base rate looks lower, but the true occupancy cost is usually higher than a comparable gross lease. Before signing, also review the lease agreement builder for residential comparison if you're weighing live-work space options.

What is CAM and why does it vary so much?

Common Area Maintenance (CAM) charges cover the landlord's cost of maintaining shared spaces: parking lots, lobbies, landscaping, common area utilities, security, and management fees. In a shopping center, this might also include mall common areas and shared signage.

CAM charges are usually estimated at lease signing and reconciled annually against actual costs - you may owe more or get a credit. Negotiate a CAM cap (limiting annual increases to a fixed percentage) and audit rights (the ability to review the landlord's actual expense records). Without these protections, CAM charges can increase substantially with no ceiling.

Always request the prior 2 to 3 years of actual CAM reconciliation statements before signing - not just the landlord's current estimate, which is often understated to make the deal look more attractive.

What is a tenant improvement allowance and how does it affect total cost?

A tenant improvement (TI) allowance is a landlord-funded credit toward buildout costs - flooring, walls, electrical, HVAC modifications specific to your business. It's typically expressed as a dollar amount per square foot.

A generous TI allowance effectively reduces your total occupancy cost since you're not paying out of pocket for improvements. Landlords often offer larger TI allowances on longer lease terms - this is a key negotiation lever. Confirm whether unused TI funds can be applied as a rent credit or are forfeited if you spend less than the allowance.

Frequently asked questions

A CAM cap limits how much your common area maintenance charges can increase year over year - commonly capped at 3% to 5% annually. Without a cap, CAM charges can rise substantially if the landlord's actual costs increase due to repairs, rising utility rates, or aggressive management fee structures. A "cumulative" cap limits total increase over the lease term; a "non-cumulative" cap limits each individual year but allows catch-up in later years. Cumulative caps are more tenant-favorable. Always negotiate a cap before signing, particularly on longer-term leases.

A CAM audit right allows you (or your accountant) to review the landlord's actual books and records supporting the CAM charges billed to you. Without this right, you have no way to verify the landlord's reconciliation is accurate. Negotiate the right to audit within 1 to 2 years of receiving the reconciliation statement, with the landlord paying audit costs if a material overcharge (typically 3% to 5% or more) is found. Many tenants who exercise audit rights discover overcharges - landlords sometimes include expenses that shouldn't be passed through, like capital improvements or leasing commissions.

A personal guaranty makes the business owner personally liable for lease obligations if the corporate tenant defaults - putting personal assets at risk even though you formed an LLC or corporation specifically for liability protection. Landlords commonly require this for new businesses or those without established credit. Negotiation options include: a "good guy" guaranty (liability ends when you surrender the space in good condition, rather than running through the full lease term), a burn-down guaranty (liability decreases over time as you establish payment history), or a capped guaranty (limited to a specific dollar amount rather than the full lease obligation).

Only if your lease allows it - and most landlords require prior written consent. Negotiate language requiring the landlord's consent not be "unreasonably withheld, conditioned, or delayed" - this gives you legal recourse if a landlord blocks a legitimate subtenant for no good reason. Some leases include a "recapture" clause allowing the landlord to take back the space instead of approving your sublease - this can trap you if your business needs change. If you're considering a shorter-term commitment or have growth uncertainty, negotiate flexible assignment and subletting rights before signing, not after you need them.

Commercial leases are generally far less forgiving than residential leases regarding early termination. Without a negotiated early termination clause, you remain liable for rent through the full lease term, though the landlord has a duty to mitigate damages in most states by attempting to re-lease the space. Negotiate an early termination option upfront - typically allowing termination after a set number of years with notice and a termination fee (often 3 to 6 months of remaining rent). For businesses with uncertain growth trajectories, this flexibility is worth the upfront negotiation cost. Without it, breaking a commercial lease early can result in years of remaining rent liability.