Real Estate Investing Modeling Non-Residential Revenue. If we look on our work out tab, we see that we have a set of assumptions and we are being asked to calculate the monthly gross potential rent, or GPR and net rental revenue from the following industrial building. We have been given total square footage, a net leaseable area, a market rent per square foot. We've also been given an annual rent increase, a vacancy rate, credit loss, percentage, concessions and free rent. The first thing I will do here is blow up my screen so we can see it a little bit more clearly.

And now to calculate the gross potential rent we are going to take the total square footage of the building, apply the net leaseable area, and multiply by the market rent per square foot per year, and then divide by 12 to get that on a monthly basis.

And that gives us our gross potential rent. We now need to make a series of adjustments to it to allow for other kinds of deductions from the GPR, such as vacancy, in the event that there is changeover of tenants. That assumption is 7% and it's also going to be calculated by the GPR. Next, we have our credit loss, and that's going to be 3% of the GPR as well. Our rent concessions are 1% of the GPR and our free rent is 5%. And if we take the net of these (keyboard clicks) we will get our net rental revenue.