When evaluating a commercial lease or purchase, the first question many people ask is: “What’s the price per square foot?” It’s a familiar metric and a great starting point. But it’s also one of the least complete ways to measure a deal.
The truth is, cost per square foot may tell you what you’re paying, but it doesn’t tell you what you’re getting.
Price Is Not the Whole Picture
That base rate leaves out critical factors: the usability of the space, the scope and cost of improvements, who’s responsible for various expenses, and how flexible the terms are if your business needs change.
It’s not uncommon for tenants to lock in a “good deal” on rent, only to face unexpected costs, awkward layouts, or restrictive lease clauses that cost more over time. The smarter approach is to ask: What will it take for this space to truly work for my business today and in the future?
For Buyers: Value Lives Between the Lines
When buying a building, the analysis goes far beyond comparable sales. Key considerations include the cost to rebuild, market trajectory, untapped potential in the property or location, and insights from cap rates.
A property that appears “fairly” priced by comps may still represent either a missed opportunity or a hidden gem. Knowing the difference can make or break the investment.
For Tenants: Function Over Floorspace
For those leasing space, the most important factor is how that space supports day-to-day operations, company culture, client experience, and long-term adaptability.
Sometimes a slightly higher base rent is worth it if it comes with better infrastructure, stronger landlord incentives, signage/visibility, or a layout that can evolve with your business. These benefits often outweigh the savings from a lower rate that comes with compromises.
Thinking in Terms of Total Impact
Every deal involves trade-offs. The key is modeling how those trade-offs affect not just cost, but flexibility, opportunity, and business performance over time.
It’s Not Just About Getting Space
In the end, it’s about securing the right space, with the right structure that aligns with how your business operates and grows. That’s where the real value lies.
