Base Rent

Base rent represents the core rent obligation in a commercial lease and serves as the starting point for calculating a tenant's total occupancy cost. It is typically expressed in annual dollars per square foot (e.g., $28/sq ft/year) and billed monthly. In gross leases, the base rent may include most or all operating expenses. In NNN leases — common for healthcare properties in the Chicago suburbs — base rent is just one component of the total cost, with CAM, taxes, and insurance added separately. Base rent often escalates annually at a fixed rate (e.g., 3% per year) or in accordance with the Consumer Price Index (CPI). Healthcare tenants should always compare effective gross rent — not just base rent — when evaluating multiple properties.

Comparing base rents across properties without accounting for NNN charges leads to inaccurate cost analysis. Always calculate effective gross rent to make fair comparisons between gross and net lease structures.

A medical office in Schaumburg quotes a base rent of $26/sq ft/year on a NNN basis. With $8/sq ft in NNN charges, the effective gross rent is $34/sq ft — a figure that should be used for accurate budget comparisons.