How it works
Write the cash list first. Then decide what the page is measuring.
- Label each offer as gross, modified, or net.
- Ask for the extra stack in writing.
- Add extras to the net path.
- Only then rank with NPV or effective rent.
Formula in words. Net occupancy = net rent + CAM + tax + insurance. Compare that to the gross rent.
| Input | Meaning |
|---|---|
| Quoted rent | The sticker |
| Lease type | Gross or net |
| Extra stack | CAM, tax, insurance |
| Credits | Free rent and TI |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$28,000
Lease B start rent$26,040
Discount rate8%
Sample NPV A$324,794
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $28,000 | $26,040 |
| Year-1 extras | $16,000 | $17,120 |
| Year-1 credit | $8,000 | $4,400 |
| Sample NPV | $324,794 | $321,785 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $28,000 | $16,000 | $8,000 | $36,000 | $33,333 |
| Year 2 | $28,840 | $16,480 | $0 | $45,320 | $38,855 |
| Year 3 | $29,705 | $16,974 | $0 | $46,679 | $37,055 |
| Year 4 | $30,596 | $17,484 | $0 | $48,080 | $35,340 |
| Year 5 | $31,514 | $18,008 | $0 | $49,522 | $33,704 |
| Year 6 | $32,459 | $18,548 | $0 | $51,007 | $32,143 |
| Year 7 | $33,433 | $19,104 | $0 | $52,537 | $30,655 |
| Year 8 | $34,436 | $19,677 | $0 | $54,113 | $29,236 |
| Year 9 | $35,469 | $20,267 | $0 | $55,736 | $27,882 |
| Year 10 | $36,533 | $20,875 | $0 | $57,408 | $26,591 |
| Sample NPV | — | — | — | — | $324,794 |
How to read the sample
Sample NPV for Gross versus net sample is about $324,794. A second path lands near $321,785. That gap is a talking point, not a promise.
Year notes for Gross versus net sample
- Year 1 of Gross versus net sample has rent of $28,000.
- Shared building cost is $16,000.
- A credit of $8,000 lowers the cash you pay that year.
- Cash out this year is about $36,000. The extra stack is the story on this net path.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $33,333 today.
- Next, year 2 rent is $28,840.
- CAM, which is a shared building cost, is $16,480.
- There is no credit in this year.
- You pay about $45,320 this year after extras and credits. Rent is low. Extras are not.
- Time shrinks later cash. At 8 percent, year 2 is worth about $38,855 today.
- Then year 3 rent is $29,705.
- Extras for the building come to $16,974.
- Credits skip this year.
- The net cash this year is about $46,679. The gap stays after year one.
- Waiting has a price. At 8 percent, year 3 is worth about $37,055 today.
- After that, year 4 rent is $30,596.
- The shared building cost this time is $17,484.
- No extra credit shows up this year.
- Cash out this year is about $48,080. A gross rival would show a higher rent and a thinner extra line.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $35,340 today.
- In year 5 of Gross versus net sample, rent is $31,514.
- Shared building cost is $18,008.
- There is no credit in this year.
- You pay about $49,522 this year after extras and credits. The last year still carries extras.
- Time shrinks later cash. At 8 percent, year 5 is worth about $33,704 today.
- Year 6 of Gross versus net sample has rent of $32,459.
- CAM, which is a shared building cost, is $18,548.
- Credits skip this year.
- The net cash this year is about $51,007. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $32,143 today.
- Next, year 7 rent is $33,433.
- Extras for the building come to $19,104.
- No extra credit shows up this year.
- Cash out this year is about $52,537. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $30,655 today.
- Then year 8 rent is $34,436.
- The shared building cost this time is $19,677.
- There is no credit in this year.
- You pay about $54,113 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $29,236 today.
- After that, year 9 rent is $35,469.
- Shared building cost is $20,267.
- Credits skip this year.
- The net cash this year is about $55,736. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $27,882 today.
- In year 10 of Gross versus net sample, rent is $36,533.
- CAM, which is a shared building cost, is $20,875.
- No extra credit shows up this year.
- Cash out this year is about $57,408. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $26,591 today.
Add those year values. The sample NPV for Gross versus net sample is about $324,794. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.