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Sales to Rent Ratio Calculator
Sales-to-rent ratio = tenant annual sales ÷ annual rent. Healthy retail is 10-20x. Declining ratio signals sales trouble. This calculator computes and benchmarks the metric.
Sales-to-rent ratio
12
sales ÷ rent
Occupancy cost ratio
8.33%
Rent per sales $
$0.083
How the math works
Sales-to-rent ratio is the single fastest retail tenant health check. If a tenant's ratio halves over 3 years, they're in trouble regardless of how well the center's doing.
Landlords with co-tenancy clauses or percentage-rent agreements get this data monthly. Smart LLs use it to steer renewal negotiations and tenant replacement decisions.
How to Use
- Enter tenant annual sales.
- Enter annual base rent + NNN.
- Read sales-to-rent ratio.
Frequently Asked Questions
What is healthy?
QSR restaurants: 12-20x. Casual dining: 8-15x. Specialty retail: 10-18x. Grocery: 15-30x (thin margins, high turnover). Under 8x across most categories = stressed tenant.
How does it differ from OC ratio?
OC ratio = rent ÷ sales (as percent). Sales-to-rent ratio is the inverse. Same information, different presentation — brokers use one, lenders the other.
Why track over time?
Declining ratio means sales growth lagging rent growth. Rent escalators + flat sales = stressed tenant within 2-3 years. Early warning enables proactive renegotiation or replacement.
What documentation matters here?
Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.
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