Cost Per Square Foot in Commercial Real Estate

What does the rental statment "$1.00 per square foot" mean related to monthly payments in commercial space. Is that a dollar psf every month or for the year divided by 12?

1 Answer

The rental statement "$1.00 PSF" is definitely per month. It is really depending on local customs to quote the rental rate. California is usually per month basis. Seattle area is per year basis. Thus, it will quote as $12.00 per square foot.

Some rental rate is gross basis or triple-net lease basis.

Gross basis is when all charges are included in the rental rate and it is typical for office space. Triple-net lease is for typically retail commercial properties and the tenant is responsible to pay property tax, insurance, and common area maintenance charges. The rental rate is also related to the duration how long you have the lease.