PSF: Per Square Foot in Commercial Real Estate

What is PSF in Commercial Real Estate? 

PSF, or per square foot, is the way that many commercial real estate rental and sale transactions are calculated. For example, many annual leases will be set at a specific PSF rate, for example, $15 PSF. If a store is leasing 1,000 sq. ft. at $15 PSF, then their annual leasing cost would be $15,000. Broken up into 12, one-month increments, that comes out to $1250 a month. 

Net PSF vs. Gross PSF 

When giving (or getting) a commercial real estate leasing quote, the quote can be given by a broker in two different ways, as a net lease PSF quote, or a gross lease PSF quote. A net quote does not include any of a tenant's tax obligations or common area maintenance (CAM) fees. In comparison, a gross quote does include all those expenses, and may give potential tenants a much better idea of what they're getting into when it comes to signing a commercial lease. 

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