Cam Appleton, Commercial Real Estate, Coldwell Banker Prestige Realty
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Can my business afford the rent?

A quick check landlords and lenders use: total occupancy cost divided by sales. For many restaurants and shops, under about 10% is comfortable and over 12 to 15% gets hard. Enter your all-in rent and your sales to see where you sit.

By Cam Appleton, Commercial Real Estate Agent · Updated

Rent entered as

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Estimate only. Check the real numbers in your lease or listing.

How is it calculated?

Example: $80,000 of base and additional rent on $1,000,000 of sales is 8%. Under about 10% is comfortable, 10 to 15% is tight, and over 15% gets hard. Rules of thumb only.
Example. Rules of thumb, not official numbers.

Occupancy cost ÷ annual sales. Use base rent plus additional rent, before GST.

The ranges shown are commonly quoted rules of thumb. They aren’t official numbers, and margins differ a lot by concept. A high-margin business can carry a higher ratio than a grocery store.

If you’re a new business, use a careful sales forecast, not your best month.

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Send me the listing, the proposal or your lease, and I can run them with you.

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