Rent Commencement Gap Calculator

Gap between possession and rent commencement costs the landlord carry.

Annual rent

Gap days

Carry rate %

Operating expenses PSF/yr

Rentable SF

Total gap cost

$221,980

Rent lost during gap

$157,808

OpEx owed by landlord

$59,178

How the math works

Gap fraction = days/365. Rent lost = annual × frac. OpEx owed = PSF × SF × frac. Carry charge on top. Sum for total cost.

$480k × 120/365 ≈ $158k rent lost. $12 × 15k × 33% ≈ $59k OpEx. Small carry. ~$220k total gap cost — significant concession.

How to Use

Enter annual rent.
Enter gap days.
Enter carry rate %.
Enter operating expenses owed by landlord PSF.
Enter SF.
Read gap cost to landlord.

Frequently Asked Questions

Why does the gap exist?

Tenants negotiate a rent-free period after possession for build-out, typically 60-180 days. Landlord carries debt service, property taxes, insurance, utilities with no rent coming in. Explicit in lease to avoid ambiguity vs 'free rent' for negotiation.

How big should gap be?

Depends on TI complexity. Turn-key shell: 30-60 days. Full build-out office or retail: 90-180 days. Restaurant/complex use: 180-365 days. Landlord tries to shorten; tenant tries to lengthen to avoid paying rent during unproductive period.

Accelerate commencement?

Commencement triggers: substantial completion of LL's work, CO issuance, fixed outside date. Landlord prefers outside date to force tenant to accelerate. Tenant prefers substantial completion with mutual signoff. Hybrid triggers common in major deals.