Commercial Lease Calculator — United States 2026
Comparing lease options? See the true cost.
Model the real cost of a US commercial lease across retail, office, or industrial space. Include CAM charges, operating expenses, tax treatment, tenant-improvement allowances, restoration risk, and affordability against revenue.
United States Commercial Lease Notes
US commercial leases often hinge on CAM charges, triple-net pass-throughs, tax treatment, and tenant-improvement negotiations. A low headline rent can still be expensive once operating expenses and restoration obligations are layered in.
This version is tuned to US leasing decisions, where tenants compare base rent, CAM structure, deposit size, and landlord contribution to fitout before signing.
US setup: this commercial lease is tuned for dollar-denominated scenarios, American payroll and tax references, state-by-state cost differences, and the finance terms people see in lender, employer, or IRS-facing documents.
The page keeps US language in place where it is relevant, including IRS, federal withholding, FICA, 401(k), sales tax, miles, APR, down payment, paycheck, state tax, and USD totals.
Treat the answer as a United States estimate; before acting, compare it with provider disclosures, state rules, federal guidance, lender underwriting, payroll settings, or advice from a qualified professional.
Always engage a commercial lawyer and tenant advocate before signing a commercial lease. This calculator provides estimates for planning purposes only.
Gross vs net vs semi-gross commercial leases in the United States
The three structures you will encounter
US commercial and retail leases fall into three broad rent structures. The differences matter because they determine who pays for building outgoings, and who wears the risk of cost inflation over the term.
| Lease type | Tenant pays | Landlord pays | Common use |
|---|---|---|---|
| Gross (full-service) | Fixed rent only | All operating costs (taxes, insurance, CAM) | Multi-tenant office buildings |
| Modified Gross | Rent + a negotiated split of operating costs | The remaining agreed share | Mid-size office and flex space |
| Net / NNN (triple-net) | Rent + property taxes + insurance + CAM | Structure and capital works (roof & structure) | Retail pads, single-tenant industrial, big-box |
Read 'net' carefully
A 'net' lease may be single-net (N — tenant adds property tax), double-net (NN — tax + insurance), or triple-net (NNN — tax + insurance + common area maintenance). US landlords use 'net' loosely, so always check the expense schedule and the base-year language in the lease itself. There is no federal retail-lease statute — what costs can be passed through, and any tenant protections, are set by the lease contract and state common law (see card below).
Typical commercial lease outgoings breakdown
Outgoings typically add 15–35% to gross occupancy cost
Outgoings are the costs of running the building that a net lease passes through to the tenant — usually a significant add-on to the headline rent. They are invoiced periodically on an estimated basis with an annual reconciliation. The tenant proportion is normally calculated by lettable area (tenancy NLA ÷ building NLA).
| Outgoing | Typical share of total | Notes |
|---|---|---|
| Property taxes | 20–35% | Set by local county/city assessor |
| Building insurance | 5–10% | Higher in coastal / flood / wildfire zones |
| CAM (common area maintenance) | 15–25% | Parking, landscaping, shared systems |
| Janitorial / cleaning | 10–15% | Common areas and suites |
| Property management | 5–10% | Typically 3–5% of rent |
| Elevators, HVAC, fire/life-safety | 15–25% | Larger share in high-rise |
| Security | 5–10% | Downtown buildings only |
The CAM estimate vs year-end reconciliation
At the start of each year the landlord bills estimated CAM and operating expenses; at year-end a reconciliation statement trues it up against actual spend, and the tenant receives a credit or a balancing invoice. There is no statutory audit right — negotiate one into the lease, along with a CAM cap, an exclusions list, and a base-year definition. Challenging inflated management fees or capital improvements billed as 'maintenance' is a common source of negotiation, and many leases grant the tenant a contractual right to audit the landlord's books.
US commercial lease types, terms and tenant protections
No federal retail-lease statute
The United States has no national retail- or commercial-lease act. Commercial leases are governed by the lease contract and each state's common law, so tenant protections, disclosure rules and remedies vary state by state — and, for property tax and recording, county by county. Unlike residential tenancies, commercial tenants are generally presumed to be sophisticated parties, so the written lease controls. The terms below are the building blocks you will negotiate.
| Term | What it means | Watch for |
|---|---|---|
| Gross / full-service lease | One rent covers most operating costs | Base-year and expense "stop" definitions |
| Net / NNN (triple-net) | Tenant pays taxes, insurance and CAM on top of rent | Uncapped CAM and capital pass-throughs |
| Modified Gross | A negotiated split of operating costs | Exactly which expenses you share |
| CAM charges | Common area maintenance reimbursements | Caps, exclusions and audit rights |
| Percentage rent (retail) | Base rent plus a % of sales over a breakpoint | How "gross sales" is defined and the breakpoint |
Protect yourself in the contract
Because there is no statutory backstop, negotiate protections directly into the lease: a CAM cap and exclusions list, an audit right, an early-termination or co-tenancy clause for retail, a personal-guaranty limit, and clear assignment/subletting rights. Local law (and zoning, ADA and build-out rules) differs widely, so always have a commercial real-estate attorney licensed in the property's state review the lease before signing.
US commercial market rents by city and grade 2026
Downtown office — asking rents per square foot per year
Asking rents below are approximate Class A full-service-equivalent annual rents per square foot ($/SF/yr) drawn from JLL, CBRE, Cushman & Wakefield and Colliers 2024 Q4 / 2025 Q1 research. They exclude concessions, which remain elevated post-COVID — major-market tenant-improvement allowances and free-rent packages can offset 20–35% of face rent.
| Market | Trophy $/SF | Class A $/SF | Class B $/SF |
|---|---|---|---|
| New York (Midtown) | $150 | $90 | $65 |
| San Francisco | $110 | $75 | $55 |
| Boston | $95 | $70 | $50 |
| Chicago | $60 | $45 | $32 |
| Dallas / Atlanta | $50 | $38 | $27 |
Suburban and industrial
Suburban Class A offices typically sit at 55–70% of downtown Class A asking rents. Prime warehouse and logistics space in inland hubs (the Inland Empire, Dallas–Fort Worth, central New Jersey) now commands $9–$18/SF/yr triple-net for modern big-box product — up sharply on the back of e-commerce demand. Retail varies hugely: a prime corridor or regional-mall pad can run many times the rent of a secondary strip-center space in the same metro.
Make-good obligations at end of lease
Standard vs strict make-good
'Make-good' is the tenant's obligation to return the premises to a defined state at end of lease. There are two common US formulations: Standard make-good returns the premises in the condition documented at lease commencement (the condition report), allowing for fair wear and tear. Strict make-good (sometimes called 'base-building' make-good) requires the tenant to remove all fit-out, partitions, cabling, signage and carpet — leaving a clear base-building shell. Strict make-good on a 5,000 sq ft office can cost $60,000–$120,000; on a large retail tenancy, much more.
Negotiating a cap or a cash settlement
Tenants should push for one of: (a) a capped make-good obligation ($X per sq ft), (b) a cash settlement alternative that lets the landlord absorb make-good in an outgoing refurbishment, or (c) a 'back-to-grey' clause that allows the fit-out to remain if the incoming tenant accepts it. Where the landlord intends to refurbish anyway, insisting on strict make-good has been held to be unconscionable by tribunals in some cases.
Condition report and dilapidations
A dated, photographed condition report signed at commencement is the single most valuable make-good evidence. Without it, disputes fall back to the lease wording alone — often favoring the landlord. Industry bodies such as BOMA publish standards on building condition and measurement, but restoration ("surrender condition") obligations are ultimately driven by the lease wording and applicable state law, so review them with a commercial real-estate attorney before signing.
Where these figures come from
Business figures on this page are drawn from the IRS (business income tax, estimated tax), SBA.gov (federal small-business resources), the Department of Labor (employer obligations), and your state department of revenue and Secretary of State (sales-tax permits and business formation).
- Corporate tax rate (21% flat, C-corporation) — IRS — Corporations.
- Deducting business rent — IRS — deducting business expenses.
- Estimated tax & employer obligations — IRS — estimated taxes.
- Business registration (EIN) — IRS — EIN.
- Employer pay guidance — the US Department of Labor.
- Choosing a business structure — SBA — business structures.
Last checked: April 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.
Select the question that matches where you are right now.
The total cost shows the full commitment over your lease term — base rent plus outgoings, compounded by annual rent reviews. The year-by-year chart shows how the gross rent escalates each year. The bond is a significant upfront cash requirement on top of the total lease cost.
The base rent figure in your lease is the net rent. Your actual outgoings are on top of this. Always compare commercial leases on a gross basis: add estimated outgoings to base rent for each year. Outgoings can vary significantly — request three years of audited actuals from the landlord, not just the landlord's budget estimate.
A 3% annual rent review seems small but compounds over time. Starting at $60,000/yr: Year 2 = $61,800, Year 3 = $63,654, Year 5 = $69,551. Over 5 years, you pay 5.3% more total rent than if rent stayed flat. At 5%/yr, the compounding effect is more significant. The year-by-year schedule chart makes this visible — the bars grow each year.
The bond (typically 3–6 months rent) must be funded before you open. It is not a cost — it is returned at lease end — but it locks up working capital for the full lease term. A 6-month bond on $60,000/yr = $30,000 tied up for 3 years. Factor this into your startup capital requirement. A bank guarantee avoids cash lockup but incurs a bank fee (typically 1–2% of the guarantee amount per year).
Rent-free periods and fitout contributions directly reduce your effective cost. Switch to Standard mode to enter these and see their impact on total cost and net annual rent.
A 3-month rent-free period on a $60,000/yr lease over 3 years: saves $15,000 upfront, effective annual rent = ($180,000 − $15,000) ÷ 3 = $55,000/yr. A fitout contribution of $50,000 over 3 years: effective annual saving = $16,667/yr. Combined, the effective net annual cost could be $38,333/yr vs the headline $60,000. Always calculate effective rent to compare incentive packages across different premises.
A landlord's fit-out contribution (a tenant-improvement or TI allowance) is generally taxable income to the tenant under the IRS default rule — unless it qualifies as a "qualified lessee construction allowance" under IRC §110 (a short-term retail lease of 15 years or less, spent on qualified long-term real property), in which case it is excluded from gross income. The treatment turns on how the allowance is structured, so always confirm it with your CPA before finalizing the deal. The gross contribution is rarely the net benefit after tax.
A rent-free period typically means rent is free — but outgoings are usually still payable. On a $12,000/yr outgoings lease, a 3-month rent-free still costs $3,000 in outgoings during the free period. The saving is on rent only, not on the total gross cost. This is an important distinction when comparing rent-free periods: some leases offer "full incentive" (rent + outgoings free) vs "rent only free." Confirm which applies in the Letter of Intent before proceeding.
Whether a lease is affordable depends on your business type and revenue. The rent-to-revenue ratio is the most reliable affordability indicator.
Retail businesses should not pay more than 10% of gross revenue in rent and outgoings. At $72,000/yr gross rent, you need $720,000/yr in revenue to stay within this threshold. This is a planning metric, not a guarantee of viability — margins vary significantly. A high-margin business (jewelry, luxury goods) may tolerate 12–15%. A low-margin business (grocery, convenience store) may need to be under 7%.
The monthly rent cost is a fixed outflow regardless of your revenue. In slow months, this is the most painful cost in the business. Before signing, model your monthly cashflow at 60%, 80%, and 100% of projected revenue — confirm you can service the rent obligation through slow periods without running out of cash. Many businesses fail in the first year due to inadequate working capital to cover fixed rent during ramp-up.
Day-one cash requirement = bond + first month rent + fitout costs + equipment + stock + 3 months operating reserve. For a $60,000/yr lease: bond $30,000 + month 1 $6,000 + fitout (self-funded, $50,000) + 3 months reserve ($18,000) = $104,000 minimum before opening. This is why commercial leases are often the largest single capital requirement when starting a business. Model this carefully before committing.
In 2026, vacancy rates in CBD and suburban commercial markets give tenants more leverage than in previous years. Here is how to use it.
Before instructing lawyers, reach commercial agreement on key terms via a Letter of Intent (LOI): base rent, rent-free period, fitout contribution, bond amount, review mechanism, option terms, and make-good provisions. The LOI is non-binding but sets expectations. Lawyers then document the agreed terms — reversing negotiated terms after lawyers are engaged is difficult and expensive.
Priority negotiation points: (1) Rent review mechanism — CPI or 3% fixed, whichever is lower; (2) Break clause at the midpoint of the term; (3) Assignment and subletting rights without requiring landlord consent; (4) Make-good limited to "fair wear and tear" with a monetary cap; (5) Personal guarantee cap — negotiate a dollar limit, not an unlimited guarantee; (6) CAM cap or exclusions (capital works, property-tax reassessments).
A commercial lawyer review of the lease is essential — typically $1,500–$4,000 for a standard lease. This cost is trivial relative to a $227,000 three-year commitment. A specialist commercial tenant-rep broker can also negotiate on your behalf — often resulting in better incentives and lease terms than self-negotiation achieves. Tenant-rep brokers are typically paid out of the leasing commission the landlord already budgets, so representation is often free to the tenant. The single most important thing you can do before signing is to get independent legal advice from a commercial lease specialist.