Commercial Lease Cost Per Square Foot: 2026 Metro Index

Commercial lease cost per square foot for Class A office in Q1 2026 ranges from $24.80/SF/yr asking in Detroit to $87.20/SF/yr asking ($72.10/SF effective) in Manhattan, a 3.5x spread. Retail premiums to office run 1.15x, restaurant 1.32x, industrial discounts to 0.42x of office. Add NNN/CAM of $4 to $19/SF on top depending on metro for the all-in number.

TL;DR

Per-square-foot rent is the comparison currency in commercial real estate, but the asking number alone is misleading. Always compute effective rent (asking less the value of free rent and TI over the term) for the apples-to-apples comparison. In Manhattan Q1 2026 the asking-vs-effective spread is 17%; in Portland CBD it’s 25%+. The per-square-foot benchmarks below are sourced from Q1 2026 brokerage reports (CBRE, Cushman & Wakefield, JLL, Newmark, Colliers, CommercialEdge) cited per metro.

Class A office Q1 2026 by metro (asking $/SF/yr)

For per-metro detail (vacancy by submarket, NNN/CAM, free rent, TI), follow the metro link or see Cheapest cities for commercial office space and Best cities for small business commercial lease.

Property type multipliers (vs Class A office)

Same metro, different property type, the rent shifts:

• Office Class A: 1.00 (the benchmark)
• Office Class B: 0.78 (older finishes, smaller floorplates)
• Retail storefront: 1.15
• Restaurant / QSR: 1.32 (grease, hood, gas premium)
• Industrial / warehouse: 0.42

Source: Cushman & Wakefield US cross-asset Marketbeat and CBRE Restaurant Trends 2026 for the restaurant ratio specifically.

Asking rent vs effective rent: the spread

The asking rent is the price the marketing flyer says. The effective rent nets out the value of free rent and TI over the term. In soft markets the spread is wide:

• Manhattan Q1 2026: 17% spread ($87.20 asking, $72.10 effective)
• San Francisco Q1 2026: 13% spread (FSG) but with substantial concessions
• Chicago Q1 2026: 19% spread ($48.70 asking, $39.20 effective)
• Austin Q1 2026: 19% spread ($54.80 asking, $44.10 effective)
• Seattle Q1 2026: 15% spread ($58.40 asking, $49.60 effective)

The effective rent is the number to use in your TCO model. The asking number is for press releases.

All-in cost: what’s actually paid

Per-square-foot asking rent does not include NNN, CAM, or escalations. The all-in cost loads in:

• NNN/CAM: $4 to $19/SF/yr depending on metro and structure (Cook County Chicago is highest)
• Annual escalations: 3% standard, compounding to roughly 16% above year 1 by year 5
• Tenant-paid utilities: $2 to $6/SF/yr depending on metro and use
• Less: TI allowance (amortized): $5 to $20/SF/yr equivalent over a 5-year term
• Less: free rent abatement (amortized): $2 to $14/SF/yr equivalent over a 5-year term

A $50/SF asking rent in a Tier 2 metro typically becomes $58 to $68/SF all-in once NNN/CAM and escalations are loaded, less concession credits.

Editorial perspective: cheap rent isn’t always cheap

We believe rent is rarely the most important variable in metro selection. Workforce access wins. A 30% rent saving in a market where you can’t recruit talent costs more than full-price rent in a market where you can.

We believe SF, Manhattan, and Boston are still mispriced as “expensive” in headlines that ignore the asking-vs-effective spread. The effective rent in SF Class A is now competitive with Austin asking rent. Don’t dismiss premium markets without modeling the effective number.

We believe Detroit, Cleveland, Memphis, and Buffalo are not always “cheap for a reason”. They are cheap because of structural oversupply. For tenants whose customer base or workforce pull is national rather than local, they offer real opportunity. For tenants whose growth depends on local hiring, they are a hiring trap masquerading as a savings.

Frequently asked questions

What’s the average commercial rent per square foot in 2026?

National median Class A office in Q1 2026 is roughly $42/SF/yr blended across our 25-metro set. National median retail PSF is $26.40/SF NNN per JLL Retail Outlook. National median industrial is $10.80/SF NNN per Prologis Industrial Index Q1 2026.

What’s the most expensive metro for commercial office space?

Manhattan, with Class A asking rent of $87.20/SF/yr in Q1 2026 per CBRE Manhattan Marketview. Effective rent net of concessions: $72.10/SF/yr. San Francisco Class A is close on a full-service-gross basis at $78.40/SF.

What’s the cheapest top-25 metro for commercial office space?

Detroit, with Class A asking rent of $24.80/SF/yr in Q1 2026 per Newmark Detroit. The Class B office floor in our set is also Detroit at $16.10/SF.

Why is San Francisco rent still high if vacancy is 31%?

Asking rent and effective rent diverge in soft markets. SF Class A delivers 9 to 14 months free + $80+ PSF TI on 5-year deals; the effective rent is meaningfully below the asking rent. Trophy product remains tightly priced; Class B/C is the soft segment.

Are 2026 commercial rents higher or lower than 2024?

Mixed. Retail rose 14% nationally (median $26.40 in 2026 vs $23.10 in 2024 per JLL). Industrial rose roughly 8% nationally. Office is bifurcated: trophy Class A held value; Class B/C declined 10 to 15% in soft markets.

How do I compare cost across metros fairly?

Compute effective rent (asking less concession value) and load NNN/CAM into the all-in. Use our pillar calculator to model the full TCO and compare metros side by side.

Are property tax differences material across metros?

Yes. Cook County (Chicago) commercial assessments run 25% of full market value, the highest US ratio, putting Chicago NNN at $14 to $19/SF. Texas metros benefit from no state income tax but elevated property tax. Per-metro NNN benchmarks are in the metro-specific pages.

Should I lease in a tier-2 metro to save rent?

Sometimes. Tier-2 metros with strong job growth (Raleigh, Nashville, Charlotte, Tampa) offer 30 to 50% rent savings vs Tier 1. Tier-2 metros with structural oversupply (Detroit, Cleveland) save 50%+ but with hiring constraints. Choose by workforce access first, rent second.

Per-metro pages

Click into any metro for vacancy, NNN/CAM, free rent, TI, and submarket detail:

• San Francisco
• New York City
• Boston
• Miami
• Seattle
• Los Angeles
• Chicago
• Dallas
• Denver
• Atlanta
• Houston
• Austin
• San Diego
• Washington DC
• Philadelphia
• Phoenix
• Nashville
• Portland
• Minneapolis
• Charlotte
• Raleigh
• Tampa
• Orlando
• Las Vegas
• Detroit

Related guides

• Retail space lease cost per square foot
• Restaurant lease cost per square foot
• Warehouse lease cost per square foot
• Cheapest cities for commercial office space
• Best cities for small business commercial lease
• Cheapest commercial lease markets

Sources

1. CBRE Marketview Reports accessed 2026-05-02
2. Cushman & Wakefield Marketbeat accessed 2026-05-02
3. JLL Office Market Statistics accessed 2026-05-02
4. Newmark Market Reports accessed 2026-05-02
5. CommercialCafe National Office Report accessed 2026-05-02
6. Prologis Industrial Index accessed 2026-05-02
7. JLL Retail Outlook accessed 2026-05-02

Not financial or legal advice. Estimates based on publicly available market data and broker reports. Commercial real-estate is highly local and deal-specific. Consult a licensed commercial real-estate broker and a real-estate attorney before signing any lease.