To calculate the Net Effective Rent (NER) in Excel, you will typically follow a formula that takes into account the total cost of the lease over its term, including any concessions like free months of rent, and then divides that by the total term of the lease to get the average monthly cost.
Here's a step-by-step guide on how to set up a Net Effective Rent calculation in Excel:
Here is a simple example of the calculation in Excel format:
The formula in Excel for Total Lease Cost without concessions would be:=B1 * B2
The formula for Total Concessions would be:=B1 * B3 + B4
The formula for Net Lease Cost with concessions would be:= (B1 * B2) - (B1 * B3 + B4)
Finally, the formula for Net Effective Rent would be:= ((B1 * B2) - (B1 * B3 + B4)) / B2
You would input each of these formulas into their respective cells to get the calculations you need.
Remember to replace B1, B2, B3, and B4 with the actual cell references in your Excel spreadsheet that correspond to the Monthly Rent, Lease Term, Free Months, and Lump Sum Credit, respectively.
Learn more about how we extract Concessions from text and compute Net Effective Rent for you in HelloData.ai on our article