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Retail Occupancy Cost Calculator
Retail occupancy cost — total tenant outlay (rent, CAM, taxes, insurance, utilities, and percentage rent) divided by annual sales — predicts tenant viability better than any other single metric. Landlords pre-screen tenants on this ratio; tenants benchmark themselves against category norms. This calculator computes both the base-rent-only ratio and the all-in occupancy cost percentage.
Total occupancy cost %
9.44%
Base rent only %
6.67%
Total annual occupancy
$170,000
How the math works
Retail occupancy cost = (base rent + CAM + taxes + insurance + utilities + percentage rent) ÷ sales. Healthy ratios depend on category: jewelry 12-16%, apparel 8-12%, restaurants 8-12%, services 6-10%, big-box anchors 1-3%.
Above-norm occupancy cost predicts tenant failure — landlords use the ratio to screen tenant viability before signing leases.
How to Use
- Enter tenant annual sales.
- Enter base rent, CAM/taxes/insurance, utilities, and percentage rent.
- Read total occupancy cost ratio and base-rent-only ratio.
Frequently Asked Questions
Healthy occupancy cost benchmarks?
Apparel 8-12%, restaurants 8-12%, jewelry 12-16%, services 6-10%, big-box anchors 1-3%, gas/c-stores 4-7%.
Why include percentage rent?
It's an actual cost to the tenant — a successful tenant might trip percentage rent and effectively raise occupancy cost. It must be in the ratio for true viability assessment.
What if occupancy cost is too high?
Tenants negotiate concessions (rent abatement, percentage rent only) until ratio falls into healthy range. Landlords reject tenants whose pro-forma occupancy ratios exceed category norms.
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