Face rent is not what the lease costs
Free rent, improvement allowances, escalations and who carries the operating expenses all move the real number. Proposals get normalised before they get ranked — otherwise you are comparing labels.
Two proposals at the same rent are rarely the same deal
A gross lease at $32 and a triple-net at $24 look eight dollars apart. Add taxes, insurance and common area maintenance to the second one and they can land within a dollar of each other.
- Concessions spread across the termTwelve months free on a ten-year deal is a real discount and it is not a twelve-month discount. Net effective rent is what it actually comes to.
- Improvement allowances valued properlyA TI allowance is worth what it costs you to do the work yourself, amortised over the term — not its headline number.
- Operating expenses on the right sideThe lease type decides who carries taxes, insurance and CAM, and that is usually the largest single difference between two offers.
Proposals, normalised
| Comp | Asking | Adjusted |
|---|---|---|
| Building A — gross28,900 SF · Landlord carries opex | $11.40 | $7.85 |
| Building B — NNN34,200 SF · 6 mo free, $25/SF TI | $7.60 | $7.72 |
| Building C — modified gross30,500 SF · Base year stop | $9.10 | $7.94 |
Ranked on total occupancy cost, Building B wins by 22 cents — on face rent it looked $3.80 cheaper than A.
Then check the document says what you agreed
The proposal you compared and the lease you are asked to sign are different documents, and the gap between them is where the unpleasant surprises live.
- Terms pulled out with their clauseDates, rent steps, the recovery terms and the option language, each shown against the sentence it came from so checking one is a glance.
- Recovery language read, not assumedHow the operating expense share is actually calculated, including any base year or stop, which is where a 'net' lease stops being simple.
Cardinal Freight Systems — Lease + 2 amendments
42 pages · extracted 8 terms
- Commencement1 Jul 2021
“The Term shall commence on July 1, 2021 and continue for one hundred twenty (120) months.”
p.3 §2.1
- Expiration30 Jun 2031
“…expiring at 11:59 p.m. on June 30, 2031, unless sooner terminated.”
p.3 §2.1
- Base rent$7.85 / SF
“Annual Base Rent of Seven and 85/100 Dollars ($7.85) per rentable square foot.”
p.4 §3.1
- Lease typeNNN
“Tenant shall pay its Proportionate Share of Taxes, Insurance and Common Area Maintenance.”
p.7 §6.2
What this is not built for
The free comparison tool takes four proposals. If you routinely rank eight structured scenarios against each other, or your analysis turns on after-tax or GAAP treatment or goal seeking, that is what dedicated lease analysis software does and it does it far better than we do.
It is worth being specific about, because the two jobs look similar and are not. Ours is: normalise a handful of real proposals quickly and correctly, and then read the lease that follows. The comparison is written up here, including the parts where we lose.
Questions people ask
How do I compare two lease proposals fairly?
Normalise them before you compare anything. Free rent, improvement allowances, escalation structure and which operating expenses you carry all move the real cost, so two proposals at the same face rent are frequently several dollars per square foot apart once those are accounted for.
What is net effective rent?
The rent you are actually paying once concessions are spread across the term. A ten-year deal at $30 with twelve months free is not a $30 deal, and net effective rent is the number that says what it is instead.
Why does the lease type matter so much?
Because it decides who carries the operating expenses, and those are not small. A gross lease at $32 and a triple-net lease at $24 can land within a dollar of each other once taxes, insurance and common area maintenance are added to the second one. Comparing the headline figures answers the wrong question.
How many proposals can I compare at once?
The free comparison tool takes four. That is a real limit and it is worth saying — if your workflow involves ranking eight structured scenarios side by side, dedicated lease analysis software is built for exactly that and we are not going to pretend otherwise.
Can it read the proposals themselves?
It can read executed leases and amendments and pull the terms out with the clause behind each. For a letter of intent or a proposal that is still being negotiated, entering the handful of terms directly is usually faster than uploading anything.
Where this goes next
Compare lease proposals
Four proposals, normalised. Free, no signup.
Net effective rent
The number that makes proposals comparable.
NNN, gross and modified gross
Who pays what, and why the headline rate misleads.
TI amortization calculator
What an improvement allowance is actually worth.
Compared to MRI ProCalc
Where dedicated lease analysis goes deeper.
Lease comps
Whether the rent you are offered is market.
Rank the offers on what they actually cost.
Normalise proposals to net effective rent and total occupancy cost, then read the lease that follows against what you agreed. Free plan, no credit card.