Effective Rent
Effective rent is a normalized rent metric that accounts for concessions such as free rent, tenant improvement allowances, and other incentives, typically averaged over the lease term. It is used to compare leases with different concession packages on a more economically consistent basis.
- Where it applies
- Generally, not specific to New York
- When it comes up
- Lease Negotiation / Marketing
- Property types
- Commercial Leasing (Retail/Office/Industrial)
Read more in the Knowledge Base
- Rent Concession Structures - Free Months, Reduced Rent, and Net Effective RentLandlords
- Understanding Effective Rent and ConcessionsRenters
- The Effective Rent CalculatorRenters
- The Concession ParadoxLandlords
- Negotiating Your Lease RenewalRenters
Related terms
Commercial Leasing Terms
- Additional Rent
- Assignment and Subletting Clause
- Base Rent
- Base Year
- Commencement Date
- Common Area Maintenance (CAM)
- Full-Service (Gross) Lease
- Gross-Up
- Modified Gross Lease
- Rent Commencement Date
General information, not legal, tax or financial advice.