Price Per Square Foot

Price per square foot ($/SF) is the purchase price divided by the building's rentable or gross square footage. A 100,000 SF warehouse bought for $12,000,000 is $120/SF.

How it's used: $/SF is the per-foot basis metric for industrial, retail, and office — the non-residential equivalent of price per unit. It's the fastest way to benchmark a deal against comparable sales and against replacement cost.

Why it matters: like per-unit pricing, $/SF anchors the cap rate to a basis. Buying well below replacement cost is a structural margin of safety — a new competitor can't undercut your rents if they'd have to build at a higher basis. On NNN single-tenant deals, also read $/SF against the rent per foot to gauge how much of the price is the building versus the lease. For industrial outdoor storage, $/SF is the wrong lens entirely — IOS is priced on rent per acre, not building area.

Formula: Price per square foot = Purchase price ÷ Building square footage

See the small-industrial underwriting guide.