# How do you calculate commercial real estate cost per square foot?

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## How do you calculate commercial property cost per square foot?

Price per square footage is simply the overall price of the property divided by the total square footage of the property. For example, let’s say a rental unit that’s 50 feet long and 50 feet wide is available for ​\$40,000​. The square footage of this rental space is (50 ft) x (50 ft) = 2,500 square feet.

## How do you calculate price per sqft?

Price per square foot is calculated by dividing the price of the home by the square footage of the home to come up with a price per square foot number. For example, if the price of the home is \$100,000 and it is 1,000 square feet, the price per square foot is \$100.

## What does price per square foot mean in commercial real estate?

Price per square foot (PPSF) is a common term used in the commercial real estate industry. It denotes the site dimensions of office buildings, retail centers, and industrial buildings. It can be calculated by dividing the price of the building by the building’s square feet.

## What is the average commercial price per square foot?

In Q2 2020, the average price per square foot for US offices was just over \$35. Retail averaged out to \$18.09 / square foot, and industrial space came in at just under \$8 / square foot. However, there are significant variations in average prices based on location and real estate class.

## How do you find the purchase price of a commercial property?

The cap rate is the net operating income of the property divided by its current market value (or sales price). An example might look something like this: Take a property with a gross potential income of \$500,000, subtract a 10% vacancy factor of \$50,000 and you will be left with an effective gross income of \$450,000.

## How do you determine the value of a commercial property?

To calculate the value of a commercial property using the Gross Rent Multiplier approach to valuation, simply multiply the Gross Rent Multiplier (GRM) by the gross rents of the property. To calculate the Gross Rent Multiplier, divide the selling price or value of a property by the subject’s property’s gross rents.

## How do you calculate commercial rental rates?

How to Calculate Commercial Rent:

1. Take Your Price Per Square Foot.
2. Multiply That by Your Total Square Footage.
3. That Gives You Your Total Annual Rent.
4. Divide by Twelve for Monthly Rent.

## How do you calculate price per square foot for a commercial lease?

Multiply the amount by the rentable square footage to determine your monthly cost. Divide that amount by your usable square footage to calculate your actual price per usable square foot. For example, if the rentable square footage is 1,130 and the price is \$1 per square foot, your monthly lease amount is \$1,130.

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## How do I find the last sale price of a commercial property?

To find properties recently sold, simply filter a property search by most recent sale date. This will quickly serve up recently sold commercial properties in any county in the US. For example, across the country, there are currently more than 500,000 commercial properties that have been sold within the last 90 days.