Commercial Lease Comparison Calculator
Compare up to four commercial lease proposals side by side. Enter the terms of each and see net effective rent, total occupancy cost and net present value for all of them at once, normalized across NNN, modified gross and full service gross so the numbers are actually comparable.
Compare the lease proposals
The proposals
Annual. Used for the present value of each proposal.
Proposal A
Proposal B
Lowest cost proposal
Proposal B
$860,681 NPVCheaper than Proposal A by $285,177 on a present-value basis, discounted at 8.0% a year.
- Effective occupancy cost
- $23.70/SF/yr
- Net effective rent
- $23.70/SF/yr
- Total occupancy cost
- $1,185,106
- Gross-equivalent rent
- $34.00/SF/yr
- Free rent value
- $170,000
- TI allowance
- $450,000
Not comparable at face rent
You have entered more than one lease structure. A full service gross rent already includes operating expenses; an NNN rent does not, so the tenant pays them on top. Comparing the headline numbers directly understates the cost of the NNN space by roughly its whole operating expense load. The gross-equivalent row below puts every proposal on the same basis.
Side by side
| Proposal A | Proposal B | |
|---|---|---|
| Face rent | $24.00/SF/yr | $34.00/SF/yr |
| Lease type | NNN | Full service gross |
| Gross-equivalent rent | $33.50/SF/yr | $34.00/SF/yr |
| Rentable SF | 10,000 | 10,000 |
| Term | 60 months | 60 months |
| Free rent value | ($60,000) | ($170,000) |
| TI allowance | ($250,000) | ($450,000) |
| Base rent over term | $1,214,193 | $1,635,106 |
| Operating expenses paid | $504,368 | included |
| Total occupancy cost | $1,468,560 | $1,185,106 |
| Effective occupancy cost | $29.37/SF/yr | $23.70/SF/yr |
| Net effective rent | $19.28/SF/yr | $23.70/SF/yr |
| NPV of total cost | $1,145,858 | $860,681 |
Every figure is a cost to the tenant, so lower is better. Gross-equivalent rent is base rent plus the operating expenses the tenant carries in year one. Present value discounts each month's rent and expense at 8.0% a year, applied as 0.6667% a month to end-of-month cash flows; the TI allowance is credited at lease commencement and is not discounted.
How to compare commercial lease proposals
Face rent is the number every proposal leads with and the one that decides the fewest deals. A landlord quoting $34.00/SF full service and one quoting $24.00/SF NNN may be asking for almost exactly the same money once operating expenses land on the tenant. The first step in any honest comparison is putting both on the same basis.
Normalize the lease structure first. Under a full service gross lease the quoted rent already carries taxes, insurance and operating costs. Under NNN the tenant pays those separately, so the real cost is base rent plus the opex load. A modified gross lease sits between the two: the tenant pays increases above a base year, so the cost is zero in year one and grows from there. Until all three are expressed as total cost to the tenant, the headline rents are three different units of measurement.
Then price the concessions. Free rent and a tenant improvement allowance are real money and they are the two levers a landlord will pull hardest. Six months free on 10,000 SF at $34.00 is $170,000. A $45/SF allowance on the same space is $450,000. Either can outweigh several dollars of face rent, which is exactly why the higher headline number often wins.
Finish on net effective rent and present value. Net effective rent spreads every cost and credit across the full term and divides by square feet, giving one comparable rate. Net present value goes further and accounts for when the money moves, which matters when one proposal front-loads its concessions and another spreads them. Where two proposals have different terms, present value is the figure to trust.
What this lease comparison calculator includes
Up to four proposals
Compare two, three or four competing lease offers side by side in one table rather than in three separate spreadsheets.
Structure normalization
NNN, modified gross and full service gross are converted to a common gross-equivalent basis, so the headline rents stop being three different units of measurement.
Free rent and TI allowance
Both concessions are priced in dollars and netted against the rent, because they are the two levers a landlord pulls hardest.
Net effective rent
Every cost and credit spread across the full term and divided by square feet, giving one comparable $/SF/yr rate per proposal.
Net present value
Monthly cash flows discounted at a rate you set, so proposals with different terms or different concession timing can still be ranked honestly.
Annual escalation
Rent and operating expenses both step on the anniversary, so a low starting rent with a steep escalator does not look cheaper than it is.
Worked example: $24.00 NNN against $34.00 full service
Sample inputs
- Proposal A
- 10,000 SF, 60 months
- A: face rent
- $24.00/SF NNN
- A: operating expenses
- $9.50/SF
- A: concessions
- 3 months free, $25/SF TI
- Proposal B
- 10,000 SF, 60 months
- B: face rent
- $34.00/SF full service
- B: operating expenses
- Included
- B: concessions
- 6 months free, $45/SF TI
- Escalation
- 3% a year
- Discount rate
- 8.0% a year
At face value Proposal A looks $10.00/SF cheaper. It is not. Adding the $9.50/SF of operating expenses the tenant carries under NNN brings A to a gross equivalent of $33.50/SF against B at $34.00/SF, a difference of fifty cents, not ten dollars.
From there the concessions decide it. B carries twice the free rent ($170,000 against $60,000) and $200,000 more of tenant improvement allowance. Those two line items are worth more than the fifty-cent rent premium across a five-year term, which is why B comes out ahead on both net effective rent and present value.
Total occupancy cost lands at $1,468,560 for A against $1,185,106 for B. That is a net effective rent of $23.70/SF/yr for B against $29.37/SF/yr for A. On a present-value basis at 8.0% a year, B costs $860,681 against $1,145,858 for A: cheaper by $285,177, and present value is the figure to lead with when the proposals have different terms or very different concession timing.
The calculator above runs exactly this comparison as its default, so you can change one input at a time and watch which way the answer moves.
Frequently asked questions
How do you compare an NNN lease to a full service gross lease?
Put both on the same basis before you compare anything. Under a full service gross lease the quoted rent already carries taxes, insurance and operating costs. Under NNN the tenant pays those separately, so the real cost is base rent plus the operating expense load. A $24.00/SF NNN rent with $9.50/SF of operating expenses is a gross equivalent of $33.50/SF, which is fifty cents below a $34.00/SF full service quote, not ten dollars below it.
What is net effective rent?
Net effective rent spreads every cost and credit across the full term and divides by square feet, giving one comparable rate. It nets free rent and the tenant improvement allowance against the rent actually paid, so two proposals with identical face rents but different concession packages produce different net effective rents. It is the single number to lead with when two proposals run for the same term.
How is a modified gross lease treated in a comparison?
A modified gross lease sits between NNN and full service gross: the tenant pays operating expense increases above a base year, not the expenses themselves. That means the tenant's expense cost is zero in year one and grows from there as expenses escalate. Comparing a modified gross quote to an NNN quote at face rent overstates how cheap the NNN space is in the early years and understates it later.
Should I compare lease proposals on net effective rent or NPV?
Net effective rent when the terms match, net present value when they do not. Net effective rent treats a dollar in month 60 as identical to a dollar in month 1. Net present value accounts for when the money actually moves, which matters when one proposal front-loads its concessions and another spreads them, and it is the only fair basis when the two proposals run for different lengths of time.
How much are free rent and a TI allowance actually worth?
Enough to decide most comparisons. Six months free on 10,000 SF at $34.00/SF is $170,000, and a $45/SF tenant improvement allowance on the same space is $450,000. Either can outweigh several dollars of face rent across a five-year term, which is exactly why the proposal with the higher headline rent often turns out to be the cheaper one.
More commercial real estate calculators
Pair the lease comparison calculator with these tools for complete deal analysis.
TI amortization calculator
Amortize tenant improvement costs over the lease term.
Lease commission calculator
Leasing commissions from term, rent and structure.
Purchase commission calculator
Purchase commission breakdowns with co-broker fees.
Cap rate calculator
Calculate NOI and cap rates from rent, expenses, and purchase price.
DSCR calculator
Check debt service coverage and the max loan it supports.
Property valuation calculator
Price per SF for building and land, plus annual rent potential.
Loan payment calculator
Monthly payments with interest-only periods and balloon payments.
Related guides
CAM charges & gross-up
How recovery works per lease type, and the five things to check in a reconciliation.
Net effective rent
The face rent with the concessions taken out, and the check that catches a wrong one.
Commercial lease types
NNN, gross, modified gross and full service, and who pays the operating expenses.
What is a rent roll?
The foundation document behind every lease.
CoStar Lease Analysis alternative
How the two compare for modelling a lease, and where each one wins.
MRI ProCalc alternative
Against the specialist incumbent, including where it is genuinely deeper.
Commercial real estate metrics
Every metric used in CRE analysis, explained.
How to analyze a CRE deal
Full deal analysis framework from rent roll to decision.
What is NOI?
The income figure every valuation starts from.
A tenant compares two proposals. A landlord compares two hundred.
DealWise AI derives NOI from your actual rent roll (lease by lease, with escalations, reimbursements and rollover), then projects cash flow, debt service and exit value across the hold. Free to start.