Call Us: (817) 439-3224

What Factors Affect Commercial Property For Rent Prices?

If you are looking for commercial property for rent, perhaps you are curious what factors affect the prices of those properties.  You have perhaps noticed a fairly wide-range of prices per square foot in your city, and that has you wondering what gives?  Who is pulling the strings regarding pricing, and what are they basing those prices on?

We will tell you in this article. We are RDS Real Estate, leading the way in industrial properties for lease and commercial property for lease in the Greater Fort Worth area. Call us at 817-439-3224 if you are in the market for quality commercial property in the Tarrant County area.

But right now, let’s look at the pricing factors of a commercial property lease in your city.

How to determine the monthly lease payment of commercial property for rent

A quick word about determining a monthly lease payment based on the square footage price of any property.  Let’s say you are looking at a 2000 square foot shop for rent, and it is renting at $10 per square foot.  That would compute to 2000x$10, or $20,000 rent for the year. Divide that by twelve equal payments, and your monthly lease would be approximately $1666 per month.  In addition, of course, you would have to consider secondary costs like utilities and WiFi to determine your overall monthly rental cost of that property.

The question then becomes this: how is that $10 per square foot determined?

How is that “per square foot” price determined?

To put a simple spin on the matter, the local market determines what the cost of commercial space for lease will be.  Stated more simply, if the market will bear a $2 per square foot cost, per month, on retail space for lease, if people will pay that, then the price will be set there.  A poorer, less-prosperous area of the city might only bear a $1.50 per square foot monthly lease price.  A very prosperous area of the city, say Rodeo Drive in Beverly Hills, California, might bear a $5.00 per square foot cost per month.

Factors which further affect the rental cost would be location, access to main roads, access to public transportation, and possible zoning problems.

Fairly flexible pricing for commercial property for rent

Please note that there really is very little governing the setting of price for commercial property.  Property owners must look at the “going rate” in a particular area, and determine whether their property is at the norm with regards to attractiveness, above the norm, or below the norm.

These fluctuating prices, and the way they are determined, is good news in one respect: none of them are etched in stone like some Biblical story of the past.

Almost always negotiable

Commercial real estate leases are almost always negotiable, and this is a crucial piece of information to have if you are looking for a favorable rental.  If you cannot negotiate a better price, you may be able to negotiate better terms for the lease, and this is especially true when the market is down as it has been in 2020-2021 because of the pandemic.  Many a business owner used the poor market conditions to negotiate better leases for their companies.  You would be wise to follow their lead in 2022 and beyond.

A word about RDS Real Estate

RDS Real Estate did not become one of the leaders in the Fort Worth area by accident. We built a reputation based on outstanding customer service, a local company which bends over backwards to make our clients happy with the properties they rent.  Call us and put us to work for you.

Share This