Lease Commission Amortization Calculator

Every new commercial lease has upfront landlord capital — tenant improvements, leasing commissions, and free rent. Amortizing these into a per-month cost across the lease term gives net effective rent (NER), the true comparison metric when evaluating competing deals with different TI packages.

Base rent per SF per year

Leased square feet

Lease term (years)

Commission (% of total rent)

Tenant improvement / SF

Free rent (months)

Total upfront capital (TI + LC + free rent)

$618,000

Tenant improvement $

$450,000

Leasing commission $

$98,000

Free rent concession

$70,000

Amortized cost / month of term

$7,357

Capital cost / SF

$61.80

Net effective rent / SF / year

$19.17

How the math works

When a lease is signed, the landlord pays TI, broker commissions, and sometimes free rent up front. Amortizing these costs over the lease term shows the true per-month and per-SF carrying cost of a deal — the basis for comparing offers and computing net effective rent.

Net effective rent = (total rent − concessions − TI − commissions) ÷ (term × SF). It's the number most brokers quote when comparing deals with different free-rent and TI packages.

How to Use

Enter base rent per SF per year and leased square footage.
Enter lease term in years.
Enter broker commission as a % of total rent.
Enter TI allowance per SF and free rent months.
Read total capital cost, per-month amortization, and NER.

Frequently Asked Questions

Commission structure?

Office/retail brokers typically get 4-6% of total lease value (base rent × SF × term). Some markets use tiered: 6% years 1-5, 3% years 6+. For 10+ year deals this matters.

TI that stays vs tenant property?

Building-standard improvements (walls, ceilings, HVAC) depreciate over the lease term as capital. Tenant-specific branding/equipment is typically tenant-paid and doesn't affect landlord NER.