A tool designed to estimate the periodic cost of leasing business premises, it assists in determining affordability and benchmarking against market rates. It often incorporates factors such as square footage, location, lease type (e.g., gross, net), and market comparables to arrive at an estimated rental payment. For example, a prospective tenant might input the desired square footage of an office space, the geographic location, and the type of lease to receive an approximation of the expected monthly rent.
The employment of such an instrument streamlines the process of financial planning for both landlords and tenants. It provides a basis for negotiating lease terms, evaluating investment opportunities, and assessing the viability of operating a business in a specific location. Historically, these estimations were performed manually, relying on spreadsheets and market research. The advent of digital versions has increased accuracy and efficiency in the rental assessment process.
