How to use the effective rent calculator
Korea converts a commercial lease into a single figure, the deposit plus one hundred times the monthly rent, to decide how much statutory protection the tenant gets. US law has no such threshold and no comparable commercial tenant statute. The number that actually matters when you sign a US commercial lease is effective rent: what the space costs per month once free rent and the improvement allowance are spread across the term.
Enter the quoted base rent, the lease term in months, any free rent period, and the improvement allowance the landlord is contributing. The calculator returns the total base rent, the value of the concessions, the effective monthly rent, and how far that sits below the quoted rate.
Legal basis (as of September 2026) — US commercial leases are governed by general contract law rather than by tenant protection statutes. The residential protections tenants rely on, such as the implied warranty of habitability and statutory security deposit caps, do not extend to commercial tenancies. Most states also require a lease longer than one year to be in writing under the statute of frauds, for example New York General Obligations Law §5-703.
This calculator is for reference only and is not legal advice. Lease economics and remedies turn on the exact contract language. Consult a licensed attorney or a commercial broker before signing.
Frequently Asked Questions
It is the average monthly cost after concessions are spread across the whole term. A landlord quoting a high base rent with several free months can end up cheaper than a lower quote with no concessions.
Very little. Commercial leases are treated as arm’s length contracts, so renewal rights, rent caps, and deposit limits exist only if the lease grants them.
Not in this calculation. Compare base and effective rent first, then add the expense structure, whether triple net, modified gross, or full service, since that can change the ranking of two offers.