Commercial Lease

[chet645]

I am trying to develop a formula that will calculate a lease commission for a commercial real estate lease, in a single cell, using several lease parameters and without creating a lease cash flow schedule. Commercial leases can have various terms (in months) and rent escalations at various dates within the term, and leasing commissions are typically calculated as a percentage of the rent over the entire lease term.

Was wondering if anyone could help me derive a formula that can calculate a lease commission using the parameters below. Again, my goal is to calculate the commission in a single cell, without creating a rent schedule. I'm trying to be as concise as possible in the template. The parameters of the lease that can vary are as follows:

Inputs:
- Lease Term (in months, e.g. 60 months)
- Starting Lease Rate ($ per square foot per month, e.g. $2.00)
- Square Footage Leased (e.g. 10000 sf)
- Frequency of rent escalations (e.g. every 12 mos)
- Rent Escalation amount (e.g. 10% increase in rent at the escalation month)
- Lease Commission Percent (e.g. 4%)

Result:
Total Lease Commission

If anyone can help me, I would be very appreciative.

Regards,

Chet

 

[Noodleski]

Hi Chet,

I can't speak for the rest of the board, but maybe we can help you keeping the calculation concise, but without knowing how you want your calculation done makes it a bit difficult? Could you demonstrate the logic you want applied to an example? You have given an example of the different parameters, so it shouldn't be too hard to make the calculation manually for once to demonstrate what you're looking for.

 

[chet645]

Hi Chet,

I can't speak for the rest of the board, but maybe we can help you keeping the calculation concise, but without knowing how you want your calculation done makes it a bit difficult? Could you demonstrate the logic you want applied to an example? You have given an example of the different parameters, so it shouldn't be too hard to make the calculation manually for once to demonstrate what you're looking for.

Thanks for your reply Noodleski. See my example below. The idea would be that I could input a value in the blue font cells and the Total Lease Commission Due would change dynamically. I can do this calculation by creating a lease rent schedule, but as I mentioned in my previous post, am hoping to keep it as concise as you see it below. Lease commission are typically calculated by taking a percentage of the total amount of rent over the course of the lease.

Lease Inputs:					Inputs
Lease Term (# of Months)				120
Starting Lease Rent ($/SF/MO)				2.00
Lease SF					10,000
Frequency of Lease Escalations (# of Months Between)	60
Escalation Amount (% Increase)			10.00%
Lease Commission (% of Total Lease Rent)		4.00%
Result Cell:
Total Lease Commission Due				100,800

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Really appreciate your help.