lease comparison
How do CFOs review commercial lease comparisons?
How do CFOs review commercial lease comparisons?
A CFO wants one occupancy stack, one rate, and a nearby worse case. First-year rent is not the review.
This page belongs to a validation / pilot concept. It is not generally available. Payment is not collected.
Questions this page also answers
What does this page answer?
A CFO wants one occupancy stack, one rate, and a nearby worse case. First-year rent is not the review.
What should sit beside it?
The nearby owner page and one worked walk.
What is not answered here?
A legal read and a location vote.
What is the next step?
Open the related compare or model page and keep the same rate.
Plain-language definition
Finance reviews leases as cash commitments.
The packet should show usable feet, extras, and the rate.
A worse case proves the rank is not fragile.
Legal terms still sit beside the math.
The review is a consistency check, not a location vote.
This page sits under Lease comparison.
Need the next step? Open Present scenarios to a CFO.
See What belongs in a comparison when you want the nearby walk.
Open Talk economics to a CFO if this page is not the last step.
Investopedia defines net present value as later cash brought back to today. See Investopedia on NPV.
Why it matters
A pretty broker slide dies in a finance meeting.
Hidden rates look like advocacy.
A thin gap needs a sensitivity note.
CFOs forward packets they can audit.
How it works
- Open with the stack, not the story.
- Show both options on one timeline.
- Print the rate.
- Add one worse extra path.
- Name the next ask.
Formula in words. CFO packet = stack + rate + worse case.
| Input | Meaning |
|---|---|
| Start rent | First-year rent before extras |
| Extras | CAM, tax, or insurance the tenant still pays |
| Credits | Free rent or build-out money |
| Term | How many years the cash list runs |
| Discount rate | How hard later cash is shrunk |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
| Metric | Path A | Path B |
|---|---|---|
| Start rent | $45,000 | $41,850 |
| Year-1 extras | $10,000 | $10,700 |
| Year-1 credit | $8,000 | $4,400 |
| Sample NPV | $407,850 | $392,687 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $45,000 | $10,000 | $8,000 | $47,000 | $43,519 |
| Year 2 | $46,350 | $10,300 | $0 | $56,650 | $48,568 |
| Year 3 | $47,741 | $10,609 | $0 | $58,350 | $46,320 |
| Year 4 | $49,173 | $10,927 | $0 | $60,100 | $44,175 |
| Year 5 | $50,648 | $11,255 | $0 | $61,903 | $42,130 |
| Year 6 | $52,167 | $11,593 | $0 | $63,760 | $40,180 |
| Year 7 | $53,732 | $11,941 | $0 | $65,673 | $38,320 |
| Year 8 | $55,344 | $12,299 | $0 | $67,643 | $36,545 |
| Year 9 | $57,004 | $12,668 | $0 | $69,672 | $34,853 |
| Year 10 | $58,714 | $13,048 | $0 | $71,762 | $33,240 |
| Sample NPV | — | — | — | — | $407,850 |
Sample NPV for CFO review sample is about $407,850. A second path lands near $392,687.
Year 1 of CFO review sample has rent of $45,000.
Shared building cost is $10,000.
A credit of $8,000 lowers the cash you pay that year.
Cash out this year is about $47,000. Year one carries the CFO review sample credit.
Later cash gets a shrink for time. At 8 percent, year 1 is worth about $43,519 today.
Next, year 2 rent is $46,350.
Assumptions
- The CFO review sample uses one visible 8 percent rate.
- Credits hit in year one unless the page says otherwise.
- Both options share the same extra basis.
- No percentage rent sits in this teaching walk.
Edge cases
A mid-year start needs a stub period, not a fake full year.
A credit that pays later must move to that later year.
A cap on extras changes the later risk, not the first sticker.
Common mistakes
- Opening with face rent.
- Using a different rate per landlord.
- Hiding move cost on a relocation.
- Calling a sample a client result.
Decision implications
A CFO wants one occupancy stack, one rate, and a nearby worse case. First-year rent is not the review.
If the gap is thin, show a second rate before anyone picks.
If one path wins only from a mistimed credit, rebuild the list.
This page answers one question. Nearby pages cover the next step.
See Present scenarios to a CFO when you need that next step. Open What belongs in a comparison for the nearby walk. Use Talk economics to a CFO if you want a second path.
Limits
- The number does not score daylight, transit, or floor plate.
- The number does not replace a legal read.
- Do not let one metric pick a space the team cannot use.
- Do not use this page as a clone of a nearby question.
U.S. BLS describes how brokers advise clients on property deals. See BLS broker occupation data.
Next step
This site is a validation / pilot concept. It is not generally available. Payment is not collected.
Ready for a bounded next step? Request Pilot Access or see how it works and compare commercial leases.
How do you compare two commercial lease proposals? · How do free rent periods and tenant improvement allowances affect NPV? · How do you compare leases with different term lengths? · How do you normalize commercial lease proposals? · How do you compare a gross lease and a net lease? · What belongs in a commercial lease comparison? · How do tenant-rep brokers compare lease offers? · How do CAM charges change a lease comparison?
Trusted sources
These are public references. They are not endorsements and not client results.