how do you calculate your office rent if they tell you the lease rate?

Question

I am looking for office space for a new company. I have seen lease rates varying from $5 to $25. HOw do I calculate my lease payment based on these numbers?

Answer 1

It means $5 - $25 per Sq. Ft. of office space.

Answer 2

Yes that is correct. You take your rate times the square footage. That will give you the annual rent. Divide that by 12 and you will get your monthly rent. However that is not all. There are many kinds of office leases. The rates itself does not tell the whole story. In most basic terms, there is the "Gross Lease", and there is the "Triple Net Lease". If you have a Gross Lease, it means that the rate quoted to you is an all inclusive rate. You pay a set amount of rent every month and the landlord is responsible for all other expenses such as electricity, taxes, insurance, maintenance, repairs and everything under the sun. In this type of leases, the rates tend to be higher. However, it eliminates the need to deal with all the other expenses and the risk is passed on to the landlord. For example, if insurance and taxes goes sky high, the landlord takes a hit. Not you. With the net lease, the landlord quotes you a lower price but your are responsible for everything. The triple net lease means rent plus your pro-rather share of property taxes, insurance and maintenance (such as utilities, cooling and heating, repairs, janitorial, landscaping etc). You as the tenant takes the risk if expenses get out of control. So please verify what kind of lease you are getting into before you can truley compare which property is a better deal. Hope this helps.

Answer 3

The rate is normally expressed as dollars per square foot per year, sometimes per month. So if it's per year, you take the number of square feet times rate per foot, then that product is divided by 12 to get the monthly rent. Building owners sometimes add on a percentage to account for common areas like hallways, lobbies, and stairwells. So be sure you know what is, and is not, included. Ask the lessor about taxes, operating expenses, parking. Are utilities separately metered (meaning you will get a bill for your own use only), or are utilities included in the rent? How much of a deposit will be required, and will it be kept in an interest-bearing account for you?

Get a copy of the lease well in advance, and go over it carefully, or hire someone to do it.

Answer 4

Multiply the lease rate by the square footage, then multiply that by 12 to get the yearly cost. Divide it by 12 to get the monthly cost. Don't forget to ask about the CAM charges (Common Area Maintenance). Thay usually is charged to you based on the square footage you are renting, plan to add about 5-7% for CAM charges (cost of janitors, trash removal, maintenance, etc.)

Answer 5

I am not an expert on this issue, but I think office rentals are sometimes based on the rate per square foot of office space.

Answer 6

You times it by the number of square feet in the office. Tada. That is it!