How to Calculate a Commercial Lease

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If you are looking for space for a new business, or if you are taking a business out of the home and researching commercial spaces, you may be surprised at how commercial leases are calculated. You will still pay your rent monthly in most cases, but while shopping around you'll see costs described in annual price per square foot. While this may be confusing at first, it makes things easier in a couple of ways. First, the annual price can be matched to your annual budget. Second, the price per square foot can be a more objective metric for value.

Add up the total square-foot area of the space. If the square footage is not provided, refer to a plan or blueprint.

Multiply whatever rent will be assessed monthly by 12. This yields an annual price.


Divide the annual price by the area. For example, a space with cost, annually, of $16,080 (or $1,340 per month), with 1,035 square feet of space would cost $15.54 annually for every square foot.