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Understanding Rental Rates
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Understanding Rental Rates

Rental rates, in essence, are affected by countless elements: the lease term (duration), the size of the property, storage, views, proximity to certain locations, the current market/economy, etc. Market conditions influence rental rates, which oftentimes tend to increase. Once a lease is signed, the rental rate is fixed for the lease term. Because there are a number of factors that comprise rents and several customary ways to quote rents, it can be difficult to understand what people mean when they are discussing leasing rates.


Normally, the rate quoted reflects the amount of rent you pay per square foot. Generally square foot prices are quoted on a monthly basis, however, there are markets such as San Francisco that are quoted on an annual basis. By example, a $36.00 per square foot annual rate is equal to $3.00 per square foot when expressed as a monthly rate. While this is simple math, it can come as a bit of a shock when you hear a rate quoted for one space as $3.00 per square foot and another as $36.00. Urban office leasing is generally quoted as an annual rate, while industrial and retail are typically stated as monthly rates.

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