decompose-net-effective-rent

name	decompose-net-effective-rent
description	Convert a face rent to net effective by netting TI, free rent, and leasing commissions, so comps and underwriting use the rent the landlord actually earns. Reach for this on any rent comp.

Skill: Decompose net effective rent

Face rent is marketing; net effective is economics. This nets the concessions so two comps are comparable.

Step 1 — Gather the concession package

Face rent, term, TI allowance, free-rent months, and the leasing commission for the comp and the subject.

Step 2 — Net to effective

Spread the concessions over the term to get the net effective rent per the same basis (§3 #5).

Step 3 — Compare like to like

Only compare NER to NER; a face-to-NER comparison overstates the subject's competitiveness.

Step 4 — Flag credit and term

Note tenant credit and term — a higher NER from a weak tenant on a short term is not a better lease.

Output

A net-effective rent for each comp, an apples-to-apples spread to the subject, and credit/term flags.