Methodology: How We Compute Total Cost of Occupancy

How we compute total cost of occupancy, source market data, and verify citations.

TCO calculator formula

The all-in commercial lease cost calculator implements this sequence:

Step 1: Resolve base rent PSF

Use override if entered (>0). Otherwise look up per-metro rent for selected property type from metros.json, refreshed quarterly from CommercialCafe National Office Report, Cushman & Wakefield Marketbeat, JLL Office Insight, CBRE Marketview Reports, and Newmark Market Reports.

Step 2: Compute year-N base rent with annual escalation

yearNRent = baseRentPSF × RSF × (1 + escalation/100) ^ (N-1)

The default 3% annual escalation matches the most common structure on 2025 to 2026 office leases (top 25 metros) per CBRE Q1 2026 Lease Tracker.

Step 3: Sum base rent across full term, subtract free rent

totalBaseRent = sum(yearNRent for N in 1..term) - (yearOneRent / 12) × freeRentMonths

Free rent is subtracted from year-1 base rent (front-loaded). NNN/CAM are not abated unless explicitly negotiated.

Step 4: Add NNN charges if structure is NNN

totalNNN = leaseStructure === 'nnn' ? (nnnPSF × RSF × term) : 0

Default NNN comes from per-metro market data. Manhattan and SF Class A run $14 to $18/SF/yr blended NNN/CAM; Texas metros $7 to $11/SF; Cook County (Chicago) $14 to $19/SF.

Step 5: Add CAM charges if structure is NNN or modified-gross

totalCAM = leaseStructure !== 'gross' ? (camPSF × RSF × term) : 0

Full-service gross leases roll CAM into base rent.

Step 6: Subtract tenant improvement allowance

tiOffset = tiAllowancePSF × RSF

TI is a credit applied to buildout. We model it as a single offset at lease commencement.

Step 7: Compute tenant-side broker commission

brokerCommission = (totalBaseRent + totalNNN + totalCAM) × (brokerFeePct / 100)

Standard tenant-rep commissions average 4 to 6% of gross rent over the term, paid by the landlord per CCIM fee guide. We compute it as part of the deal economics even though the tenant doesn’t pay directly.

Step 8: Add upfront security deposit

securityDeposit = (yearOneRent / 12) × securityDepositMonths

Refundable cash outlay; we count it as an opportunity cost in the all-in TCO.

Step 9: Return total cost of occupancy and year-1 cost

totalCost = totalBaseRent + totalNNN + totalCAM + brokerCommission + securityDeposit - tiOffset

year1Cost = (yearOneRent + nnnYear1 + camYear1) - (yearOneRent / 12) × freeRentMonths + securityDeposit + brokerCommission - tiOffset

effectiveRentPSF = totalCost / RSF / term

Data sources by category

Per-metro Class A office rent

Refreshed quarterly from per-metro brokerage Marketbeat reports:

• CBRE Marketview Reports for Manhattan, Los Angeles, Austin, Nashville
• Cushman & Wakefield Marketbeat for San Francisco, Miami, Washington DC, San Diego, Tampa, Charlotte, Orlando, Dallas, Minneapolis
• JLL Office Market Statistics for Boston, Seattle, Houston, Philadelphia, Portland, Raleigh-Durham
• Newmark Market Reports for Chicago, Atlanta, Phoenix, Detroit
• Avison Young Markets for Denver
• Colliers Research for Las Vegas

Property type ratios

propertyTypeMultipliers per Cushman & Wakefield US cross-asset Marketbeat:

• Office Class A: 1.00 (benchmark)
• Office Class B: 0.78
• Retail storefront: 1.15
• Restaurant / QSR: 1.32 (per CBRE Restaurant Trends 2026)
• Industrial / warehouse: 0.42

Concession benchmarks (free rent, TI)

Cushman & Wakefield Marketbeat Q1 2026 and LoopNet TIA guide.

Operating expense (NNN/CAM) benchmarks

BOMA Experience Exchange Report for building-type operating expense benchmarks. Stratafolio CAM analysis for CAM overcharge data (n=212 NYC office leases, 11.4% average overcharge).

Industrial benchmarks

Prologis Industrial Index Q1 2026 for national median industrial rent ($10.80/SF NNN nationally; $18.20/SF in coastal logistics hubs).

Retail benchmarks

JLL Retail Outlook for national median retail PSF rent ($26.40/SF NNN in 2026, up from $23.10 in 2024).

Verification cadence

• Daily: pipeline runs at 06:00 UTC, hash-comparing each source page against its prior snapshot. Detects URL changes and content drift.
• Quarterly: full re-verification of every market data row on the 25th of January, April, July, October. lastVerifiedDate updated on every row.
• Annually: methodology review against industry standards (BOMA, BOMI International).

What we don’t do

• No fabricated data. If a market number isn’t sourceable from a brokerage report or government dataset, we don’t publish it.
• No client anecdotes. We don’t publish “we worked with a client who…” narratives. We use only public records, brokerage reports, and named industry data.
• No future predictions. We report what was true in Q1 2026; we don’t predict Q3 2026.
• No cross-network references. We don’t cite or link to other Soft Crown network sites for footprint protection.

How to verify our data

Every market number on the site has an inline citation linking to the primary source. Click the citation to verify against the source brokerage report.

For specific deal modeling, the calculator’s per-metro defaults are starting points; override with your specific deal’s actual numbers for accurate TCO.

For corrections to data: see our corrections policy.

Calculator limitations

The calculator is a tool, not advice. Limitations:

• Defaults to per-metro market medians; your specific deal may differ
• Doesn’t model exotic clauses (percentage rent, build-to-suit, ground lease economics)
• Doesn’t handle subleases (different rent and concession economics)
• Assumes standard NNN/modified-gross/FSG structures; exotic structures may not fit

For non-standard deals, engage a tenant rep broker and real-estate attorney.

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.

Data sources by metro