ExamPassCommercial Rent Calculator
Commercial rent is quoted in dollars per square foot per year, on rentable area. Rentable area is the usable area times the R/U (load) factor, which adds the tenant's share of lobbies, corridors and washrooms. Annual base rent is rentable area times the rate; monthly rent is that divided by 12. Additional rent for taxes, maintenance and insurance is charged on top, and HST applies to commercial rent. Enter a suite below to see the full monthly cost.
Enter the area, the factor and the base rent to see the rentable area, the rent and the HST.
How does the calculator work?
| To find | Formula |
|---|---|
| R/U factor | Rentable area ÷ usable area |
| Rentable area | Usable area × R/U factor |
| Usable area | Rentable area ÷ R/U factor |
| Annual base rent | Rentable area × base rate |
| Monthly base rent | Annual base rent ÷ 12 |
| Additional rent | Rentable area × additional rate |
The true R/U factor is always above 1, such as 1.14. A figure like 0.14 or 14% is only the add-on portion; type 1.14.
Compare suites properly. Two suites at the same rate per square foot can cost different amounts if their load factors or additional rent differ. Turn on "Compare a second suite" and the calculator shows the cost per usable square foot, the space your client actually occupies.
HST. Commercial rent from a landlord registered for HST normally carries 13% HST; residential rent does not. See HST on commercial real estate.
Worked example: an office suite in Markham
A tenant wants an office suite in Markham with 2,600 square feet of usable space. The building's R/U factor is 1.14. Base rent is $24.50 per square foot per year and additional rent is estimated at $13.75.
| Step | Working | Result |
|---|---|---|
| Rentable area | 2,600 × 1.14 | 2,964 sq ft |
| Annual base rent | 2,964 × $24.50 | $72,618.00 |
| Monthly base rent | $72,618 ÷ 12 | $6,051.50 |
| Additional rent, annual | 2,964 × $13.75 | $40,755.00 |
| Total rent, monthly | ($72,618 + $40,755) ÷ 12 | $9,447.75 |
| Monthly with 13% HST | $9,447.75 × 1.13 | $10,675.96 |
The tenant pays on 364 square feet it never occupies alone, the share of the common areas. That is normal, but it should be in the comparison.
Frequently asked questions
What is the difference between rentable and usable area?
Usable area is the space the tenant occupies. Rentable area adds a share of the building's common areas. Rent is charged on rentable area, so the load factor changes the rent as much as the rate does.
Is additional rent the same in a gross lease?
In a gross lease the landlord pays the operating costs out of the rent, so there may be little or no additional rent. In a net lease the tenant pays them as additional rent. See net vs gross lease.
Is this on the real estate exam?
Yes. Course 4 tests the R/U formulas and rent calculations in its leasing modules, and Simulation 2 includes leasing scenarios. The Course 4 practice questions include a rentable area and rent question.