The rent per square foot is determined by dividing the total rent by the total square footage rented. Using the annual rental amount yields the annual cost per square foot, whereas using the monthly rental amount yields the monthly cost per square foot. This assessment only applies to office and retail spaces. The rent per square foot calculation for industrial buildings is distinct.
Industrial spaces are priced by square foot and per month. In addition, industrial spaces are comprised of two independent components known as the “warehouse” and the “office.” The industrial cost per square foot is determined by calculating each element at a separate rate, then combining the results. The formula for industrial rental rates is (warehouse square footage multiplied by warehouse rent) plus (warehouse rent multiplied by warehouse square footage) (office square footage x office rent).
If the square footage of the rented facility is uncertain, calculating rent per square foot is more difficult. To get the space’s square footage, measure the width and length of the unit and multiply the two measurements. After estimating the space’s square footage, determine the annual rent. This amount is normally determined by the property owner. Multiply the monthly rent by 12 to determine the annual rate, and then divide this sum by the unit’s square footage.
For instance, if the monthly rent for a 1,500-square-foot apartment is $2,000, the annual cost is $24,000. To calculate annual cost per square foot, divide annual rent by square footage, or $24,000 by 1,500. Therefore, the annual cost per square foot is $16. Divide the annual square footage by 12 or the monthly rental amount by the total square footage to determine the monthly rate (16/12 or $24,000/1,500 = 1.33).
