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effective rental rate |
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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 Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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