Asking rent is theater. Effective rent — after free months, TI allowances, and escalations — is the real number, and it rarely appears in any public record. A field guide to reading between the lines.
A broker tells you the asking rent is $65 per square foot. The press release celebrates a “record lease” at that number. The building’s valuation is underwritten on it. And the tenant, over the actual life of the lease, will pay something closer to $48 — a figure that appears nowhere in the public record.
This is not fraud. It is the ordinary mechanics of commercial leasing, and understanding the gap between the quoted rate and the real one is the difference between reading the market and being read by it.
Every commercial lease is negotiated around three figures, and only the first is ever published.
Asking rent — sometimes called face rent — is the landlord’s opening position, quoted per square foot per year. It anchors every subsequent conversation, appears in every listing, and feeds the databases that brokers and journalists cite. Landlords have a structural incentive to keep it high: appraisals, loan covenants, and the building’s paper valuation all key off face rents.
Concessions are where the real negotiation happens. Free rent periods — six months, twelve months, sometimes two years on a ten-year term — directly reduce what the tenant pays. Tenant improvement (TI) allowances, often $60 to $100+ per square foot in major markets for new construction, fund the buildout of the tenant’s space. Moving allowances, signage rights, and expansion options round out the package. On a large lease, concessions can erase 20 to 40 percent of the face rent’s value.
Effective rent is the number that matters: total consideration over the lease term, divided by square footage and years. It is the true clearing price of the space. And it is, almost without exception, confidential.
In soft markets, the spread between asking and effective rent stretches. Landlords would rather grant eighteen months of free rent than cut face rent by $10 — because the face rent protects the building’s valuation and the owner’s financing, while the concession is invisible to everyone except the two parties at the table. This is why published “record rents” can coincide with genuine tenant bargains: both things are true simultaneously.
Escalation clauses add a further layer. A lease signed at $60 with 3 percent annual bumps looks very different in year seven than in year one — and very different from a lease signed at $65 flat. Comparing two deals requires normalizing for term length, bump structure, base year for operating expenses, and who pays for what. The professionals who do this well — tenant-rep brokers, appraisers, asset managers — guard their comp databases as crown jewels.
Residential real estate solved this decades ago: every sale price is public record, and Zillow made it ambient. Commercial leasing never followed. There is no deed registry for rents. The best data lives inside CoStar’s paywalled terminals, brokerage firms’ internal systems, and the spreadsheets of a few thousand senior dealmakers.
That opacity has a cost. Tenants routinely overpay for lack of benchmarks. Smaller landlords misprice space for lack of comps. Lenders underwrite on face rents that overstate cash flow. And the entire market operates on anecdote — “I heard the 12th floor went for…” — in an industry managing trillions of dollars of assets.
The firm that assembles the definitive public record of commercial lease rates — effective rents, not asking rents — would own one of the most valuable datasets in real estate. The name for that record should leave no doubt about what it contains.
The category-defining name in commercial lease intelligence — commercialleaserates.com — is currently available for acquisition by the firm positioned to own this data.
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