math equation for seperating base rent from nnn

In Leasing Property - Asked by Terry F. - Feb 16, 2010
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Sandy J.
Everett, MA

Base rent is typically calculated on a price per square foot . NNN is the rented area's percentage of the whole for costs such as insurance, maintenance, taxes, common area utilities, etc.

Feb 17, 2010
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Paul A.
Aurora, CO

This can be tricky if you are missing key pieces of information.
However, if you have the right data, determining what the base rent is or what the NNN expenses are can be fairly easy.
For example, Tenant A has 1,500 square feet and they are paying $1,800.00 per month. Say that all you know is that the NNN expenses for the year in question are $3.50, but you want to find out what their base rent is.
To calculate what the total rent psf is, multiply the total rent by 12 (1 year). This will give you what the total yearly rent is:
1,800 x 12 = 21,600
Next, divide 21,600 by the square footage of the space. This will give you the total rental rate (including the NNN):
21,600 / 1,500 = 14.4
Finally, subtract the NNNs from the total rental rate to find the base rent:
14.4 - 3.50 = 10.90
So, the base rent is $10.90.
This is a really simple equation to separate the base rent from the CAMs but it is not all-encompassing, so if the lease is complicated or there are items amortized into the rate or free rent, be sure to factor these items in.

Jul 15, 2010
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