When dealing with leasing commercial real estate there is a rate. The rate usually is in the form of $2.25. I figured this means $2.25 per square foot. Does this mean this rate is per year or per month (i guess per year)? How do you earn commission of bringing a buyer to one of these types of properties?

Any help would be grateful. Thanks.

It depends on if the Landlord has a set commssion structure they pay brokers who bring them tenants or if you offer the tenant for a certain commission.

I used to be a office leasing rep working for the landlord and we offered 4.5% of the total amount of the lease up to 5 years. So say the if the rent was $1,000/mo for a 5 year lease we would pay 4.5% of 60k or $2,700.

A good rule of thumb though on most leases if you are asking for a commission is usually 1 months rent.

Cats and Pajamas,

Thanks for the commission advice and the rule of thumb you gave me. I greatly appreciate it. Do you know if $2.25 per square foot for a 15,000 square food building(rate)is monthly or yearly? (roughly $34,000 a month OR a year?)

That would be a year. Most of the time the rate will be expressed yearly. So divide by 12 to get the monthly rate. That is a low price per square foot....is that warehouse space? You also need to see what type of lease that is to know what other costs will be incurred. NNN, NN, Gross etc.

I am confused by your answers "The Cats PJs". If a building is $2.25/Sq Ft and it is 15,000 sq ft, then that is a monthly lease rate of $33,750/Mo. I am not sure where you are located, but that seems appropriate if you are looking at office space in a decent location. This is obviously a large building. Even if that is a lease in a rural location in the midwest, I would find it hard to imagine the building being leased for $33,750 for the year no matter if it is NNN, NN, or Gross. That price is just not correct! It is monthly.

What type of use building is this (warehouse, office, etc.)?
Where is it located (City, State, Rural, Downtown, Business Park)?
Is it ready to be occupied or unimproved?

If you answer those, that will help answer your question. I remember when I first got into commercial real estate. I was so confused. I did not know the difference between price per sq ft on the sale and price per sq ft on the lease. That is where I made a big mistake and ended up losing a client.

Best of Luck.

It is an office building. Interested buyer wants to open up a nursing school and is looking for a place in emeryville CA (nice neighborhood). Monthly 33,000 or yearly now? Thanks for all the great advice everybody.

I am going by my past experience as an office leasing rep. My company was national in scope and we leased with the rate being expressed yearly.

jason, obviously in your example for a 15,000 square foot building $33k a month is extremely low. But office space would not lease for $2.25 expressed yearly. Most office space in most metro areas leases for $12-18/sqft. So at $15/sf x 15000 ft / 12 you are looking at $18,750 a month.

But if $2.25 was monthly in the original posters example that would be equivalant to a yearly rate of between $27/sqft. Which is quite high, but can be charged in some parts of the country.

He said the rate was expressed "in the form of $x.xx" ...and not actually that number so thats the way I took it.

So I guess it depends on what type of space and what kind of area it is in.

I don't know if I made any sense!

The 2.25 has to be for the a month.There is no way you are going to find a 15,000 sq ft building for under 3k a month rent.

Usually square feet price depends on the area.Usually bigger warehouse type properties are priced alot cheaper per square foot than regular smaller retail spaces.Here warehouse,office,industrial is anywhere from 3 to 12 a sq ft.Retail spaces in new shopping centers go for as much as 24 a sq ft.

Yes, that has to be a monthly amount. It's a pretty normal asking price for office space, probably full service/gross.

Pricing is local, both in the amount and way presented. For instance, much of the nation and San Francisco quote yearly amounts, but in Silicon Valley it's the monthly amount per sq. ft.

Commission structure is also local and further dependent on the market/specific leasing entity. For instance, you it might be set at 6% of the rent for the first three years, 4% for the next two, and 2.5% for any lease term thereafter, typically paid at lease execution, occupancy, or a combination thereof. Other owners/markets might pay a flat amount per sq. ft. per year (and you can work out the %). The commission might either be split with a procuring broker or in addition to the amount for the listing broker, depending on how tight the market is(n't) and how motivated the owner is to get it leased.

Hope that helps.

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