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  • Writer's pictureRaphael Collazo

What is Net Effective Rent?

Net effective rent is a term used in the commercial real estate industry to describe the actual amount of rent that a tenant will pay after taking into account any concessions or incentives offered by the landlord.

For example, a landlord may offer a tenant a discounted rent rate in exchange for signing a longer lease term. In this case, the net effective rent would be the discounted rent rate, rather than the full rent rate that would have been charged without the concession.

Net effective rent is often used in situations where a landlord is willing to offer incentives or concessions to attract or retain tenants. It can be an important consideration for tenants when evaluating the overall cost of leasing a commercial property, as it can significantly impact the total amount of rent paid over the term of the lease.

It's important to note that net effective rent is not the same as the gross rent, which is the full, undiscounted rent rate. When comparing different commercial properties or lease offers, it's important to consider both the gross rent and any concessions or incentives that may be offered to get a full understanding of the total cost of the lease.

If you're a business owner in Louisville, KY or its surrounding areas, I'd be happy to help you find the perfect space for you and your business as well as negotiate a favorable lease agreement! Feel free to call/text me at (502) 536-7315 or email me at

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