LANDLORDS & OWNERS · FREE TOOL
Required Lease Rate
What you have to price the space at — break-even, target return, and lender DSCR floor.
Before you put a number on the flyer, know your floor. This works backward from your carry — debt service, Texas taxes, insurance, CAM, management, vacancy, TI and commissions — to the rate that actually works.
Your numbers
Pre-filled with realistic DFW-market estimates. Change anything — results update as you type.
Every input is saved in the link — text it to a partner and they'll see the exact same scenario.
TARGET RATE (GROSS)
$38.68/SF/yr
to hit a 8.00% cash-on-cash return
Break-even rate (gross)
$32.41/SF/yr
Target rate (NNN)
$28.72/SF/yr
Break-even rate (NNN)
$22.45/SF/yr
Rate for 1.25x DSCR
$29.86/SF/yr
Annual debt service
$133,575
Property taxes
$50,600
Insurance
$14,000
CAM / operating
$32,500
Reserves
$2,500
TI + commission per year
$59,339
Annual carry if vacant
$233,175
Cost of assumed downtime
$116,587
Texas property taxes of $50,600 a year are 51% of your operating cost. If the county reassesses, this number moves — and on a NNN lease it flows through to the tenant.
Every month this space sits empty costs you $19,431. Your 6-month downtime assumption is $116,587.
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Questions people ask
How do I know what to ask per square foot?
Work backward from carry. Add debt service, taxes, insurance, CAM, management, reserves and amortized TI and commissions, adjust for vacancy, and you have your floor. Market comps tell you whether that floor is achievable.
What does it cost to leave space vacant?
Your full carry — debt service plus taxes, insurance and CAM — keeps running with no income against it. On most DFW suites that's several thousand dollars a month, which is why a slightly lower rate today often beats holding out.
Numbers are a starting point.
Thirty years in DFW and Austin means I know which of these assumptions the market will actually support. Send me your scenario and I'll tell you straight.
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