The total annual cost of occupying commercial space, combining base rent with all additional charges billed by the landlord: CAM fees, property taxes, insurance, and any other pass-through costs. Building rent represents the true economic cost of a tenancy, as opposed to the base rent figure that appears on the lease headline.
Building rent (also called total occupancy cost or total lease cost) is calculated as: Base Rent + CAM Charges + Property Tax Pass-Through + Insurance Pass-Through + Any Other Lease-Required Payments. Expressed on a per-square-foot basis, building rent allows comparison across properties with different lease structures. A building advertised at $18/SF base rent with $12/SF in additional charges has a building rent of $30/SF. Total occupancy cost analysis is essential for comparing NNN, modified gross, and gross lease alternatives, since base rent alone is not comparable across structures.
A landlord marketed office space at "$22/SF gross" while the lease included a broad expense escalation clause. After five years, the tenant's actual building rent had grown to $31/SF as operating costs above the base year were passed through, a 41% increase the tenant did not model when negotiating. The headline rate did not reflect the true occupancy cost.
Always model your total building rent, not just the base rent, when evaluating a commercial lease. Request 2–3 years of historical CAM, tax, and insurance pass-through data from the landlord to project your full occupancy cost. A lower base rent with high pass-throughs can cost significantly more than a higher base rent with capped or included expenses.
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Find My OverchargesThis page provides general educational information. It is not legal advice and may not reflect the most current law in your state. Consult a licensed attorney for advice specific to your situation.
