# Commercial Lease Effective Rent Calculator

Estimate effective commercial rent after free rent and tenant improvement allowance, with scheduled and net-effective cost per square foot.

Canonical URL: https://app.leaselineage.com/resources/commercial-lease-effective-rent-calculator

Markdown URL: https://app.leaselineage.com/resources/commercial-lease-effective-rent-calculator.md

Type: Free tool

Published: 2026-08-03

Last modified: 2026-08-03

Audience: Commercial tenants, landlords, CRE brokers, financial analysts, and lease negotiators

## Summary

Normalize scheduled base rent and concessions across a lease term into effective monthly cost and annual rent per square foot.

## From face rent to effective rent

Face rent alone does not show the economic impact of free rent or a tenant improvement allowance. Effective rent spreads the entered net rent consideration across the full term.

- Scheduled rent is calculated from area, starting rate, escalation, and term
- Free-rent months remove the applicable opening scheduled rent
- The TI allowance is treated as an entered concession for this planning view
- Net-effective rent equals net rent consideration divided across the lease term and area

## Use one concession definition

Effective-rent conventions vary. Landlord underwriting may include present value, commissions, capital costs, and discount rates that a tenant comparison excludes.

- State whether the analysis is tenant or landlord oriented
- Do not double-count TI reimbursement and tenant costs
- Model operating expenses separately
- Use discounted cash flow when timing materially affects the decision

## Citation facts

- A simple tenant-side effective-rent estimate can spread scheduled base rent less entered concessions across the full lease term.
- Free-rent value depends on the scheduled rent during the abatement months.
- Effective-rent conventions differ, so assumptions should be disclosed with the result.

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