How to Determine Fair Market Rental Rates when Leasing Space - Michael McFadden
Tenants will often bargain for a renewal right to extend the term of their lease, but the rental rate applicable during such extended term is rarely stated in the lease. Instead, most office leases provide that the rent shall be the "fair market rental rate." The landlord and tenant must agree upon a formula for coming up with the fair market rental rate. the formula will often include looking at comparable recent transactions with similar relevant factors.