Commercial Lease Cost in California
Updated July 2026 · California commercial real estate rates
$18/sqft
Warehouse /yr
$41/sqft
Office Class B /yr
$89+/sqft
Office Class A /yr
Calculate Commercial Lease Cost in California
Annual Rent
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Monthly / Total Lease
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Commercial Lease Rates in California
| Space Type | /sqft/yr | 1,000 sqft/mo | National |
|---|---|---|---|
| Office A | $88.80 | $7,400 | $60/sqft |
| Office B | $41.44 | $3,453 | $28/sqft |
| Retail Prime | $51.80 | $4,317 | $35/sqft |
| Retail Secondary | $26.64 | $2,220 | $18/sqft |
| Warehouse | $17.76 | $1,480 | $12/sqft |
| Industrial | $14.80 | $1,233 | $10/sqft |
Commercial Real Estate in California
California commercial lease rates are the highest in the nation. San Francisco Class A office space runs $70–$100+/sqft/yr. Los Angeles ranges $40–$70/sqft/yr. Retail in prime locations can reach $150+/sqft/yr.
Key Lease Terms to Understand
- • NNN: Tenant pays base rent + property taxes + insurance + maintenance
- • CAM charges: Common area maintenance; add $3–$8/sqft/yr typically
- • Rent escalations: Typically 2–4% annually built into lease
- • TI allowance: Tenant improvement allowance from landlord for build-out
- • Personal guarantee: Landlords often require for small businesses
Negotiation Tips
- • Get a tenant's broker — they're paid by the landlord, not you
- • Negotiate free rent periods (1–3 months is common in soft markets)
- • Push for higher TI allowance vs. lower rent
- • Include a subletting clause for flexibility
True Total Occupancy Cost in California — NNN Lease
NNN leases list only base rent — but total occupancy cost includes CAM charges, utilities, and insurance. Here's the real annual cost for 1,000 sqft in California.
| Space Type | Base Rent/yr | +CAM/yr | Total/yr |
|---|---|---|---|
| Office A | $88,800 | +$7,400 | $96,200 |
| Office B | $41,440 | +$7,400 | $48,840 |
| Retail Prime | $51,800 | +$5,920 | $57,720 |
| Retail Secondary | $26,640 | +$5,920 | $32,560 |
| Warehouse | $17,760 | +$2,220 | $19,980 |
| Industrial | $14,800 | +$2,220 | $17,020 |
Based on 1,000 sqft. CAM includes property tax, insurance, and maintenance pass-throughs. 3-year total assumes 3.5% annual escalation. Add utilities ($1.50–$3.50/sqft/yr) for full occupancy cost.
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Search Commercial Space →Frequently Asked Questions
How much does commercial space cost to rent in California?
Commercial rates in California average $51.8/sqft/yr for office space, ranging from $18/sqft/yr (warehouse) to $89+/sqft/yr (Class A office).
What is the difference between NNN and gross lease?
Gross lease includes all operating expenses in rent. NNN lease requires tenants to pay rent plus property taxes, insurance, and maintenance separately.
How much commercial space do I need?
Office: 150–250 sqft/employee. Retail: 1 employee per 150–200 sqft. Factor in conference rooms, break areas, and growth.
How long are commercial leases typically?
Small businesses: 1–5 years. Established businesses: 5–10 years. Longer leases typically include rent escalation clauses of 2–4% annually.
What additional costs should I budget for?
Beyond base rent, budget for security deposit (1–3 months), CAM charges, tenant improvements, utilities, insurance, and parking. Total occupancy cost often exceeds base rent by 20–40%.