What PSF Really Means in Commercial Leasing 💸 (CAM & Net Charges Explained)

Understanding Price Per Square Foot and Net Charges

Welcome back—My name is Casey Prindle, and in this video, we’re going to break down what commercial rents really cost, and why the price per square foot doesn’t tell the full story.

Let’s say you find a retail or warehouse space for lease, and it’s listed at $18 per square foot. You’re thinking, "That sounds reasonable.", but what does that even mean?

That $18 could be referencing a number of things, depending on the Lease type. It’s more than likely that $18 is just the base rent. It doesn’t include the net charges or pass-through expenses that many Leases have.

These charges usually include:

·         Property taxes

·         Property insurance

·         Common area maintenance, also known as CAM

These items can add $5 to $10—sometimes more—per square foot, depending on the property type and market. South Florida will typically carry higher pass throughs than Northern Florida.

So your $18 PSF space might actually cost you $26 or $28 PSF annually once everything is factored in. On a 2,000 square foot space, that’s a difference of roughly $1,300 to $1,600 per month—a significant amount for any business.

Now let’s quickly talk about how to calculate this:

1. Add the per square foot Base Lease Price plus the per square foot estimated net charges together.

2. Multiply the square footage by the total of the Base Lease Price and estimated net charges.

3. Divide that number by 12 to give yourself the monthly rent.

Also keep in mind: some landlords estimate CAM costs and do a reconciliation at year-end. That means if actual expenses were higher than estimated, you could get a surprise bill.

It’s also smart to ask how those CAM charges are managed. Are they capped annually? Do they include capital improvements or just routine maintenance? What portion is allocated to management fees? These are areas where costs can quietly creep up if you’re not careful.

Different property types also have different cost structures. In a shopping center, CAM might include things like parking lot striping, shared signage, or even holiday decorations. In an industrial park, it might be more about landscaping and security lighting. Knowing what your share covers can help you spot red flags before you sign.

And remember, not all square footage is created equal. Always confirm if you're paying based on usable square footage—the space you actually occupy—or rentable square footage, which may include your share of common hallways, restrooms, and lobbies. This is common in office Leasing, but not common in warehouse or retail leasing.

Call to Action: If you’re trying to figure out the true cost of a lease, and what you can afford, fill out the contact me form. I’ll help you calculate your all-in rent and show you how different listings in the area confirm. Don’t make a decision based only on base rent—make an informed decision.