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Fair Market Rent Renewal Calculator

FMR renewals bridge lease to market.

$
$
SF
%

Renewal PV

$1,771,285

Annual rent at renewal

$432,000

Rent impact vs expiring

$480,000

How the math works

Annual = market × SF. Renewal PV = sum discounted over term. Impact vs expiring = (new − old) × years.

$36 × 12k = $432k/yr. 5-yr PV at 7% = $1.77M. Impact vs $28: +$480k face over 5 yr.

How to Use

  1. Enter expiring rent PSF.
  2. Enter market rent at renewal PSF.
  3. Enter SF.
  4. Enter renewal term years.
  5. Enter discount rate.
  6. Read renewal NPV impact.

Frequently Asked Questions

FMR mechanics?

Tenant has option to renew. Rent for renewal set at Fair Market Rent (FMR) determined by independent appraisers or mutual agreement. Protects both parties from being locked into below- or above-market rates.

Determination process?

Landlord + tenant each propose FMR. Gap: third-party appraiser selected. Appraiser submits FMR. Often 'baseball' arbitration (pick higher/lower of two submissions). Decided within 60-120 days typically.

Renewal economics?

If market < existing rent, tenant renews at lower rate. If market > existing, tenant may extend or shop around. Typical renewal: 5-10 year additional term, 95-105% of FMR. Mutually beneficial in most mid-market scenarios.

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