Primary tool
Lease Economics Engine
What does this lease actually cost per square foot per year?
Net rent plus TMI, less free rent, plus any tenant improvement overspend, averaged across the term. The same inputs, read from the other side, give the landlord's effective net rent after inducements.
01Your numbers
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 |
02How it is calculated
The published method
- Net rent compounds annually from year two at the stated escalation.
- Free rent abates net rent only, unless you switch on the gross abatement toggle.
- TMI escalates separately, because recoveries track cost rather than the rent step.
- The landlord's TI allowance is treated as a day-one cost; tenant overspend is a day-one tenant cost.
- NPV discounts each year's net rent at the landlord's discount rate, end of year, then annualises the result over the term.
How these figures were produced
- Modelled — Derived arithmetically from observed inputs using the published method; not a market quote.
03Questions
Frequently asked
What is effective net rent?
The net rent the landlord actually keeps after free rent and the tenant improvement allowance are spread across the term. It is always lower than the face rate whenever inducements exist.
Why do you show both a straight-line and an NPV effective rent?
Straight-line divides total dollars by term and is how most brokers quote. NPV discounts the cash flow, which is how a landlord's investment committee sees it. Free rent taken early looks better straight-line than it does on NPV.
Does the calculator store my numbers?
No. Every input lives in the URL. Copy the link and the whole scenario travels with it — no account, no email, nothing stored.
Next: split the recovery line apart with the TMI recovery calculator, or price an abatement with the free-rent equivalence tool.
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