Enter the annual rate per square foot ($/ft^2) and the total square footage of retail space (ft^2) into the calculator to determine the Retail Rent. 

Retail Rent Formula

The following formula is used to calculate the Retail Rent. 

RR = ARP * TA / 12
  • Where RR is the Retail Rent ($/month)
  • ARP is the annual rate per square foot ($/ft^2) 
  • TA is the total square footage of retail space (ft^2) 

To calculate the retail rent, multiply the annual rate per square foot by the total retail space, then divide by 12.

How to Calculate Retail Rent?

The following example problems outline how to calculate Retail Rent.

Example Problem #1:

  1. First, determine the annual rate per square foot ($/ft^2). In this example, the annual rate per square foot ($/ft^2) is given as 15.
  2. Next, determine the total square footage of retail space (ft^2). For this problem, the total square footage of retail space (ft^2) is given as 10000.
  3. Finally, calculate the Retail Rent using the equation above: 

RR = ARP * TA / 12

The values given above are inserted into the equation below:

RR = 15* 10000 / 12 = 12.500 ($/month)

FAQ

What factors can affect the annual rate per square foot for retail rent?

The annual rate per square foot for retail rent can be influenced by various factors including the location of the property, the demand for retail space in the area, the amenities and facilities provided, the condition of the property, and the length of the lease agreement. High-demand areas often have higher rates due to the increased competition for space.

How can a business owner negotiate better retail rent terms?

A business owner can negotiate better retail rent terms by researching average rent prices in the area, understanding the property’s value, being willing to sign a longer lease for a lower rate, and demonstrating their business’s financial stability. Additionally, negotiating for benefits such as a rent-free period for renovations or a cap on annual rent increases can also be effective strategies.

Are there any additional costs associated with retail rent beyond the annual rate per square foot?

Yes, in addition to the base rent calculated by the annual rate per square foot, retail tenants may also be responsible for additional costs such as property taxes, insurance, maintenance fees (often referred to as CAM – Common Area Maintenance fees), utilities, and possibly a percentage of their sales (percentage rent). These terms should be clearly outlined in the lease agreement.