Leasing, TMI and occupancy cost
What this lease actually costs per square foot per year
Net rent is not the price. Occupancy cost is.
Add TMI, subtract free rent, amortise the improvement allowance, and a $18 net deal can land anywhere between $28 and $40 per square foot per year. The engine below does it live, for up to three offers at once, and prints the comparison sheet.
01Price your lease
Offer A
Tenant occupancy cost
$36.79/sf/yr
$3,678,564 over 10 years
Effective net rent (straight-line)
$15.27/sf/yr
Face average $20.17/sf/yr
Effective net rent (NPV)
$13.00/sf/yr
Discounted at 7%
Inducement cost
$49.00/sf
24.3% below face net rent
6 months free and $40.00/sf of TI cut the landlord's effective net rent from $20.17 to $15.27 per sf per year. The tenant's all-in occupancy cost averages $36.79 per sf per year over the term.
| Year | Net rate | TMI rate | Free months | Tenant cash out | Landlord net | PV of landlord net |
|---|---|---|---|---|---|---|
| 1 | $18.00/sf | $16.00/sf | 6 | $250,000 | $90,000 | $84,112 |
| 2 | $18.45/sf | $16.32/sf | — | $347,700 | $184,500 | $161,149 |
| 3 | $18.91/sf | $16.65/sf | — | $355,577 | $189,113 | $154,372 |
| 4 | $19.38/sf | $16.98/sf | — | $363,634 | $193,840 | $147,880 |
| 5 | $19.87/sf | $17.32/sf | — | $371,875 | $198,686 | $141,661 |
| 6 | $20.37/sf | $17.67/sf | — | $380,306 | $203,653 | $135,703 |
| 7 | $20.87/sf | $18.02/sf | — | $388,931 | $208,745 | $129,996 |
| 8 | $21.40/sf | $18.38/sf | — | $397,753 | $213,963 | $124,529 |
| 9 | $21.93/sf | $18.75/sf | — | $406,778 | $219,313 | $119,291 |
| 10 | $22.48/sf | $19.12/sf | — | $416,010 | $224,795 | $114,275 |
Printable comparison sheet
Lease comparison
Every input and every result, side by side. Prepared 2026-08-23.
| Line | Offer A |
|---|---|
| Rentable area (sf) | 10,000 |
| Term (years) | 10 |
| Face net rent, year 1 | $18.00/sf/yr |
| Escalation | 2.5% |
| TMI / CAM, year 1 | $16.00/sf/yr |
| Free rent | 6 months |
| TI allowance | $40.00/sf |
| Face average net rent | $20.17/sf/yr |
| Tenant occupancy cost | $36.79/sf/yr |
| Tenant total over term | $3,678,564 |
| Effective net rent (straight) | $15.27/sf/yr |
| Effective net rent (NPV) | $13.00/sf/yr |
| Landlord NPV of term | $912,968 |
| Winner | Cheapest for the tenant · Best for the landlord |
02Why it matters
Both sides of the same lease
A tenant is buying occupancy cost. A landlord is selling effective net rent. The two numbers come from identical inputs and almost never move together — six months free barely dents a tenant's ten-year average while cutting the landlord's effective rent by several dollars. Showing both is the whole point.
Leaselor facts
- Recoverable operating costs are 35-50% of gross occupancy cost in most Canadian office buildings — the half of the deal nobody negotiates.
- Free rent is worth more to a tenant early and less to a landlord late; the NPV gap is why abatement beats a rate cut on paper.
- A TI allowance is a landlord loan repaid through rent. Amortised over the term, it always reduces effective net rent.
03Markets
Rent, TMI and availability by city
04Carry the deal
Where these numbers go next
Leaselor is step 9 of a ten-stage commercial real estate network. Each site owns one stage and hands the same deal object to the next — no account, no email, no re-typing. Price a lease above and your numbers attach themselves to these links.
- 01ZonelorPre-planning & feasibilitySize the buildable envelope before you price anything.Soon
- 02ValulorValuation & comparablesCapitalise the NOI and test the value against local cap rates.Soon
- 03EnvirolorDue diligence & site selectionCost and time-box the ESA before your condition period runs.Soon
- 04CapitalorPre-acquisition & financingDebt-service the deal and find the loan the numbers support.
- 05InsurelorFunding conditions & insurancePrice the binder your lender makes a funding condition.Soon
- 06EscrowlorTransaction & legal closingAdd land transfer tax and closing costs to your all-in basis.Soon
- 07BuildlorConstruction & tenant improvementsPrice the hard and soft cost stack behind the build.Soon
- 08SecurlorPost-construction & asset hardeningScope the life-safety and access control sign-offs.Soon
- 09LeaselorLeasing & incomeTurn rent, TMI and vacancy into the NOI you underwrote.You are here
- 10StratalorLong-term operations & facility managementBenchmark opex and TMI to hold the NOI you underwrote.
05Clause guides
The clauses that move the number
- Net vs gross lease: what you actually payGuide
- How a TMI gross-up works and when it is fairGuide
- CAM caps: controllable costs, cumulative vs non-cumulativeGuide
- Demolition and relocation clauses: what they cost a tenantGuide
Not advice — Leaselor is a data publisher. We do not broker, arrange, or transact, and nothing here is an offer or professional advice. Figures are indicative benchmarks for comparison and must be confirmed with a licensed professional before you rely on them. About Leaselor