How This Calculator Works
Frequently Asked Questions
- Why does my total lease exposure look so much higher than my monthly rent?
- Because most tenants focus on monthly rent and ignore the full picture. Over a 5-year lease at $5,000/month with 3% escalations, $800/month CAM, and $200/month insurance, your total exposure exceeds $400,000. Adding a personal guaranty means that entire amount is on the line with your personal assets.
- What costs does this calculator not include?
- This calculator does not include utilities, tenant improvement costs, property taxes (if billed separately), after-hours HVAC charges, parking fees, or the cost of your own improvements and equipment. The true all-in cost of occupying commercial space is typically 20-40% higher than base rent alone.
- How do I reduce my personal guaranty exposure?
- Negotiate a 'burn-down' guaranty that reduces your personal exposure over time as you demonstrate you are a reliable tenant. A common structure: full guaranty for year 1, reducing by 20% per year so there is no personal exposure in year 6. You can also try to limit the guaranty to a fixed dollar amount or a fixed number of months rather than the full lease term.