effective rental rate

effective rental rate

True rent, after taking into account rent concessions; usually expressed as a dollar amount per square foot.Some parts of the country quote rents as dollars per foot per month; others use dollars per foot per year.

Example: If 5,000 square feet of office space normally rents for $20 per foot per year, but the landlord gives 6 months' free rent on a 5-year lease, then the effective rental rate is calculated as follows:

5,000 feet $20 per foot $100,000 per year

6 months free rent $0

4.5 years paid rent @ $100,000 per year $450,000

$450,000 paid rent spread over a 5-year term $90,000 per year effective rent

$90,000 effective rent 5,000 feet $18 per foot effective rental rate

References in periodicals archive ?
When measured by potential rental revenue per unit per month (defined as the effective rental rate times the occupancy rate), the U.
The national average effective rental rate for Class A office space downtown climbed 13% to $47.
Atlanta posted the third lowest tenant effective rental rate, $20.
The office sector performed favorably, with same-store NOI growth of nearly 8% and FFO net effective rental rate growth on expiring rents of over 40%.
Annual Effective Rental Rate Growth Market 3Q07 3Q08 Austin TX 5.
The current average effective rental rate for Class A office space in midtown Manhattan has surpassed the all-time high rental rates reached during the dot-com peak at the end of 2000.
rental rate and FFO annual net effective rental rate of 20% and
Worth, TX; Las Vegas, NV; Nashville, TN; and Orange County, CA, AXIOMETRICS reports that the annual rate of effective rental rate growth has been cut in half (at best) in these markets from the level of a year ago.
The multi-family purchase market remains heated, even with the residential net effective rental rate in the Manhattan market seeing an increase of less than 1% rental growth in the past year.
Ultimately, after looking at several alternatives, we were able to consummate an effective rental rate that included considerable base building upgrades at a healthy market construction allowance.
In these cases, we typically engage the landlord in simultaneous negotiations which yields our customer a longer lease term, locked in at a below market average effective rental rate.
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