6 Easy Steps to Calculating Your Office Space Cost

October 23, 2012

Finding office space can be hard enough but understanding all of the commercial real estate jargon well enough to determine your office space costs can be next to impossible for those that are unfamiliar with the commercial real estate industry. It’s always best to have a commercial real estate broker on your side to help you in determining these costs and negotiate rates. However, if you’re wanting to get an estimate of what your monthly office lease rates will be, use these 6 Easy Steps to Calculate your Office Space Cost:

Step 1 - Determine the square footage of the space

  • E.g. 2000 SF

Step 2 - Find out the Base Rental Rate

  • E.g. $20 (per SF)

Step 3 - Find out the Operating Expenses or NNN (per SF per month)

  • E.g. $8 (per SF)

Step 4 – Determine Total Rate

  • Add the base rental rate and the Operating Expenses to get the Total Rate
  • Base Rent + Operating Expenses = Total Rate
  • E.g. $20+$8 = $28 per SF

Step 5 – Determine the Yearly Cost

  • Multiply the Square Footage by the Total Rate to get the Yearly Cost
  • E.g. 2000 x $28 = $56,000 Yearly Cost

Step 6 – Determine the Monthly Cost

  • Divide the Yearly Cost by 12 to get the Monthly Cost
  • E.g. $56,000/12 = $4,667 Monthly Cost

To make calculating your office space costs easier, use this Space Calculator which provides you an easy form. All you do is input the date required and it will calculate your monthly or yearly office space costs for you.

Once you determine your monthly office space costs, you’ll be in a better position to budget for your business.

Topics: Business Operations

Nathan Smith

Austin Tenant Advisors

Nathan Smith is a commercial real estate advisor and owner of Austin Tenant Advisors, a local commercial real estate company that specializes ONLY in representing the best interests of business owners and companies in the search, selection, negotiation, and occupancy of office, retail, and warehouse space. Early on Nathan saw a need for business owners and companies to have the same expert advice as Landlords when it comes to leasing and purchasing commercial properties. In fact, he doesn't want to just level the playing field, he strives to educate and advise them in a way that puts them in a position of strength so that they find the best spaces and negotiate the best deals possible. Nathan graduated from Texas State University and had the opportunity to serve his Country in the Air Force Reserves. Nathan is married to Jennifer and has two children. He is also a die-hard cyclist and runner and has competed in numerous short and long distance triathlons and Ironman competitions.
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