Price Per Square Foot

Price per square foot (PPSF) is a common term used in the commercial real estate industry. It denotes the site dimensions of office buildings, retail centers, and industrial buildings. It can be calculated by dividing the price of the building by the building’s square feet. For example, if a 2500 square foot building is selling for $250,000, then the PPSF is $100.

Price per square foot can vary depending on where you would like to purchase or lease commercial real estate. For example, the PPSF may be higher in a downtown area than a rural area. Likewise, a strong commercial real estate market can push real estate prices up. Therefore, the PPSF, in these areas may increase.

Typically, buildings with a smaller square footage, have a higher PPSF than larger buildings.

These terms of a commercial real estate lease or sale are important to understanding so that appraisal companies can determine the building’s value and offer the best price better value and offering price. You need to know that the price the seller is asking is reasonable, and you are not getting an unfair deal.

Knowing the price per square foot in an area is also important for a building owner or user to a ballpark estimate of how much they can spend on material and labor and still turn a profit. Price per unit/ square foot can vary depending on a few factors. Understanding price per square foot can ultimately know the value of the commercial real estate investment.


Final Thoughts

If you have any questions about investments or commercial real estate jargon or if you would like more information on acquiring commercial real estate, please contact us today! You can also keep us with us on FacebookLinkedInGoogle+Instagram, and Twitter.


by Monique Lewis, Marketing Manager of Lee & Associates Orange