How to read this result
In the default example, annual base rent is $150,000.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Multiply rentable area by the base rent rate and by each annual tax, insurance and maintenance/CAM rate. Add those costs for total annual occupancy cost and divide by 12 for a monthly average.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Rentable area (sq ft)
- Rentable area. Minimum: 1.
- Base rent (USD/sq ft/year)
- Annual base rent. Minimum: 0.
- Property taxes (USD/sq ft/year)
- Tenant tax pass-through. Minimum: 0.
- Insurance (USD/sq ft/year)
- Tenant insurance pass-through. Minimum: 0.
- Maintenance/CAM (USD/sq ft/year)
- Tenant maintenance/CAM pass-through. Minimum: 0.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Rentable area | 5,000 |
| Base rent | $30.00 |
| Property taxes | $4.00 |
| Insurance | $1.50 |
| Maintenance/CAM | $2.50 |
| Item | Default scenario |
|---|---|
| Annual base rent | $150,000.00 |
| Annual NNN charges | $40,000.00 |
| Annual total occupancy cost | $190,000.00 |
| Monthly total | $15,833.33 |
Assumptions and limitations
Actual NNN leases define recoverable expenses, audit rights, caps and reconciliations contractually.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
NNN does not mean every possible lease cost is captured. Review the agreement for exclusions, administrative charges, capital items and reconciliations.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- Office of the Comptroller of the Currency — Comptroller's Handbook — Commercial Real Estate LendingNOI, direct capitalization, cap-rate valuation and DCF concepts for commercial real estate.
Frequently asked questions
Does the NNN amount include base rent?
No. The output separates the tax, insurance and maintenance/CAM total from base rent, then combines them in total occupancy cost.
Can pass-through charges change each year?
Yes. The calculator models the rates you supply for one annual scenario. It does not forecast future reconciliations or lease escalations.