How Are Commercial Real Estate Lease Rates Calculated in Germany?

Ever wonder how commercial real estate lease rates in Germany are calculated?  Well, as a commercial Realtor, I hadn't given it much thought until I received a question from a contact who had an interest in locating an office to Berlin.  The answer to the question was not readily available on the web after querying a number of ways to phrase the question.  I kept getting links to websites that only referred to how it's done in the U.S. After a bit more digging and with the help of one of the major worldwide commercial real estate firms that are out there, the answer made itself clear.  The answer as a rule is, commercial real estate lease rates in Germany are quoted and calculated on a monthly basis.  I'm sure that in the Euro-sphere it is a common custom.  Especially when a monthly per square meter lease rate is quoted at say, 26 euros per square meter which would result in an astounding 312 euros per square meter per year! Beeindruckend!, as they would say over there.  No wonder no one has any money!  Keeping in mind one square meter is equal to 10.76391 square feet, calculate that and you will be astounded in the result.  In the U.S., commercial lease rates are quoted differently in different regions of the country.  In the Northeast,  they are usually quoted on an annual basis per square foot, $12 per square foot for instance, whereas in California that same rate would be quoted as $1.00 per square foot,  seems cheaper right?, but $1.00 per square foot per month x 12 mos. = $12.00 per square foot per year, Got it?. Where am I going with this?, Well, keep in mind if you ever have a general commercial real estate question for sites in major markets around the world including the U.S., the first thing you should do is go on-line and search for major international real estate firms.  Then go to their research page links, they all have them, and drill down from there.  There is a wealth of useful information in them which will save you valuable time and is all free!  Remember the old adage, the definition of an expert is not always having the answer but knowing where to find the answer.

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