On Commercial How Do I Calculate Rent Per Unit & Per SF of Improvement

By
Mortgage and Lending with America One Mortgage Advisors CA DRE #02062657

On Commercial Real Estate Investments here is how we calculate Rent Per Unit & Per Square Feet of Improvements


Apartments:

100 Apartment Units, 750 Sq.Ft. Unit with Rent of $800 per Unit per Month 

100 Units X 750 Sq.Ft. = 75,000 Sq.Ft.
$800 Rent X 100 Units = $80,000 X 12 Months = $960,000


When analyzing Real Estate we always use Annual Numbers except for Apartments where we use:


Rent Per Unit 

Rent Per Square Foot Per Month ( $800 Rent ÷ 750 Sq.Ft. = $1.07 per Sq.Ft. per month) 

 

**By using the rent per Sq.Ft. per month we can more accurately compare various apartments.


Office, Retail, and Industrial Properties: 

Use Square Feet as the Unit of Measurement. 

 

We also quote an annual rate when giving the rental rate.


Warehouse: $20,000 Sq.Ft.
Rental Rate: $5.00 per Sq.Ft.
Annual Rent: $100,000 per year ÷ 12 Months = $8,333.33 per month


When analyzing a commercial property the Gross Potential Rent would be $100,000 and the Rental Rate is $5.00.

 

 

Posted by

Christopher Shearer is a multi-family / commercial real estate consultant achieving property owners the highest possible NOI through the implementation of optimal rents for the property, accomplished through careful market, property, comparison grid analysis, effective cost control and revenue improvement programs; identify and analyze trends and recommending appropriate strategies to increase a properties maximum efficiency. Expert at Preparing new investment analysis presentations, offering memoranda and marketing materials, including key investment metrics. IRR, COC, DCR, CR etc.

A seasoned professional, with over 15 years' experience in real estate and finance management. A real estate broker licensed in Florida and Virginia specializing in real estate and asset management of multi-family and commercial properties. Christopher is currently pursuing his M.B.A. in real estate, he holds a B.A. in business as well as an A.A. in business management. Christopher has the following state licenses; Virginia Real Estate Broker, Florida Real Estate Broker, Florida Mortgage Broker and Colorado Mortgage Broker.

Contact me for a consultation and analysis of your commercial or multi-family properties.

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Rainmaker
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Jordon Wheeler
The Jordon Wheeler Group - Fairburn, GA
J W Group Real Estate Sales and Service

Thank you for this information about commercial analysis and calculation.  Good stuff.  Best of GREAT success to you this year!

Sep 27, 2013 03:01 AM #1
Rainmaker
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Christopher Shearer
America One Mortgage Advisors - San Diego, CA
Search San Diego MLS Real Estate Listings Mortgage
Thanks for the encouragement Jordan!
Sep 28, 2013 02:58 AM #2
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Christopher Shearer

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