How do you determine a blended lease rate for leasing a property with office & industrial space?

for example,,, 3000sf of office and 7000sf of warehouse space... what is the formula?
In Leasing Property - Asked by Greg G. - Feb 4, 2011
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Nick C.
Broker/Agent
Philadelphia, PA

Greg-- Assuming you have an idea of your local office lease rates and industrial rates you can 'blend' the rates using this formula:
For the example let's assume your office lease price is $10/sf and that your warehouse space is $4/sf (again just an example, use whatever rental rates you need to for your area).
- 3,000 sf of office space at $10/sf gives you a yearly rent of $30,000 (3,000 x 10= 30,000)
- 7,000 sf of warehouse at $4/sf gives you a yearly rent of $28,000 (7,000 x 4= 28,000)
- Add those two numbers together to give you a total yearly rent of $58,000 (28,000 + 30,000= 58,000)
- To get your 'blended rate' all you need to do is divide the total yearly rent--$58,000--by the square footage of the leased space--10,000 sf--which equals $5.80/sf (58,000 / 10,000= 5.80)
So your 'blended rate is $5.80/sf for a total of $4833.33/month ((5.80 x 10,000 sf)/ 12 months) =4833.33
Hope this helps. Feel free to let me know if you have any other questions.
Nick ncisler@binswanger.com

Feb 5, 2011
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