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Net Effective Rent Detailed Calculator
NER normalizes concessions. This calculator computes fully.
Annual NER
$411,000
Gross rent over term
$4,800,000
Total concessions
$690,000
How the math works
Total rent = annual × years. Net = total − (free rent + TI + LCs). NER = net / years.
$480k × 10 = $4.8M gross. Concessions: $320k free + $250k TI + $120k LC = $690k. Net $4.11M / 10 = $411k/yr NER. 14% below face rent. Market-standard math.
How to Use
- Enter base rent per year.
- Enter free rent months.
- Enter TI allowance.
- Enter leasing commissions.
- Enter term years.
- Read NER per year.
Frequently Asked Questions
What is NER?
Net effective rent: gross rent minus landlord expenses (concessions, TI, LCs) spread over term. Allows apples-to-apples comparison of leases with different concession packages. Standard in office/retail comps.
Calculation?
Total gross rent over term − free rent − TI − LCs, divided by term years. Per-SF NER commonly used. For 10-year office lease: gross $40/SF, 12 months free, $50/SF TI, 5% LC = effective $30-34/SF NER typical.
Use?
Appraisals. Comps. Internal analysis. Investor reporting. Market surveys. More accurate value proxy than face rent. Two leases with same face rent can have 10-20% NER difference due to concession depth.
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