Rent vs Market: How To Know if You’re Overpaying per Square Foot
It’s well worth your time to calculate your dollar-per-square-foot-per-year rate, which is simply your total annual occupancy cost divided by your square footage. Then compare that to local listings. Market rates can shift quickly, especially if it’s been a couple of years since you last negotiated. Tools like LoopNet, Crexi, or CoStar can help you do the research.
If you find you’re paying 15–20% above market, that’s a red flag - even if your rent feels reasonable and was fair a few years ago. You might also be paying triple-net (NNN) charges that similar properties don’t include.
The Lease & Occupancy Cost Analyzer spreadsheet makes it easy to calculate your effective rent and total cost per square foot.
Brewery Lease Cost Calculator
What counts as “market rate” for brewery leases
“Market rate” isn’t a guess - it’s what comparable spaces are currently going for in your area. It’s your reference point for negotiating, just like you know your cost per bbl for beer.
Start with commercial listing platforms like LoopNet and Crexi. If you’ve got access to broker listings or local market reports, even better. Rates are usually listed as dollars per square foot per year, which is the standard format for commercial leases.
Let’s say you find a 5,000 sq ft space listed for $14/sq ft/year:
$14 × 5,000 = $70,000/year
$70,000 ÷ 12 = ~$5,833/month
But don’t stop at base rent - focus on comparability. Ask:
Does the space have a loading dock? Cold storage?
Is it zoned for production or just retail?
What’s the power setup? Is there drainage or floor slope?
Is it in an industrial park or a mixed-use retail strip?
A taproom in a shopping plaza will rent differently than a warehouse built for canning and distribution - even at the same size. You want apples-to-apples comparisons.
Also, always factor in NNN charges. A space listed at $12/sq ft with $4 in NNN is really $16/sq ft once you calculate total occupancy cost. That’s the number that should guide your negotiations.
Once you gather a few solid comps, calculate the average or median market rate and bring it to the table. If the lease you’re being offered is 20% higher, you’ve got leverage. And if your base rent is low but the NNN charges are rising fast, that’s worth flagging too.
No matter the case, walk into negotiations with numbers, not vibes. Handle it like the savvy business owner you are - not just a tenant trying to cut a deal.
How to compare your brewery’s lease to the local norm
To know if your lease is fair, you’ve got to calculate your effective rent per square foot and compare it to what similar spaces are going for. It’s a simple formula - just make sure you're using the right numbers.
Total Annual Occupancy Cost ÷ Square Footage = $/sq ft/year
That occupancy cost includes:
Base rent
NNN charges (taxes, insurance, maintenance)
If you leave out NNN, you’re not comparing apples to apples.
Example:
Base rent: $6,000/month = $72,000/year
NNN charges: $18,000/year
Total occupancy = $90,000/year
Square footage: 6,000 sq ft
Effective rate = $90,000 ÷ 6,000 = $15/sq ft/year
Now say your comps are around $12/sq ft/year. That means you're 25% over market. That's negotiating leverage - or at least a reason to revisit your terms. On the flip side, if you're at $15 and the market is $20, but your landlord’s trying to crank up your NNNs, that’s worth pushing back on too. NNN charges compound, and can close that gap quickly.
Making this calculation gives you clarity. You’re not relying on vague comparisons or hearsay - you’ve got hard numbers and real benchmarks. It’s one of the simplest, most impactful tools you can use to negotiate like a business owner instead of guessing like a tenant.
What to do when you're paying 20%, or more, over market for your brewery’s lease
If your analysis shows you're 20% or more above market, don’t freak out - but don’t ignore it either. That kind of gap can cost you tens of thousands of dollars over the life of your lease. It’s worth taking action.
First, model the cost of relocating vs staying put.
Relocation comes with costs. Such as downtime, permitting, buildout, moving equipment, and customer disruption. But, overpaying for years adds up fast too.
Model both scenarios:
Lease cost over the next 3–5 years if you stay
Moving costs + new lease terms if you relocate
Don’t forget downtime, transition headaches, and the strain on your team
If staying put ends up costing more, then relocation should be on the table. If it doesn’t, at least now you have data to justify a better deal.
Second, use that gap as leverage.
Landlords won’t give you a discount just because you ask - but they’ll listen if you show them real data. If a comparable building nearby is going for less per sq ft and includes better features, point that out. They’ll know you’ve done your homework.
Even if they won’t lower the rate, they might offer:
Free rent for a couple months
Tenant improvement funds
A cap on escalation
Other, restructured terms that reduce your long-term cost
Third, delegate the research.
Don’t try to pull every comp yourself. An assistant or property manager can:
Pull listings from LoopNet, Crexi, or broker reports
Check buildout specs (drainage, zoning, docks, etc.)
Summarize in a quick comparison table with $/sq ft and notes
This should take about 2–3 hours. A small investment for potentially saving your brewery thousands each year.
Bottom line: don’t guess. Even a little market research is better than none. If you’re over market, know by how much - and act accordingly. That’s how you turn a lease from a fixed cost into a strategic asset.
