Secondary tool
Free rent vs a lower rate
What face rate is this abatement actually worth?
Spread the abated months across the term and the offer collapses into a single equivalent rate — one straight-line, one discounted. Compare that, not the headline.
01Your offer
Equivalent straight-line rate
$19.03/sf/yr
Same total dollars, no abatement
Equivalent NPV rate
$18.68/sf/yr
Discounted at 7%
Straight-line saving
$2.00/sf/yr
What the free rent is worth per year
NPV saving
$2.35/sf/yr
Worth more when taken early
6 months free on a 5-year term at $20.00/sf/yr is worth the same as a face rate of $19.03/sf/yr with no abatement — and $18.68/sf/yr once the landlord discounts the cash flow.
02How it is calculated
The published method
The abatement is applied to the front of the term against escalating net rent, the collected rent is totalled, and that total is divided by area and term for the straight-line equivalent. The NPV equivalent discounts each year at the stated rate and annualises the present value over the same term.
How these figures were produced
- Modelled — Derived arithmetically from observed inputs using the published method; not a market quote.
For a full offer including TMI and TI, use the Lease Economics Engine.
03Questions
Frequently asked
Which is better: free rent or a lower face rate?
For a tenant with a cash-flow constraint, free rent wins because the saving lands immediately. For total cost over a long term, a lower face rate usually wins because escalations compound off a smaller base.
Why do landlords prefer to give free rent?
It preserves the headline rate used to value the building. A rate cut lowers the capitalised income; an abatement is a one-time cost the landlord can absorb below the line.
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