What type of rent is considered the best measure of the true cost of occupied space?

Effective rent is the best measure of the true cost of occupied space because it takes into account not just the base rent that tenants are obligated to pay, but also any concessions or incentives given by the landlord. For example, if a property offers a tenant a month of free rent or reduced rates for the first year, the effective rent calculation reflects these elements, providing a more accurate picture of what a tenant will actually pay over the lease term.

This holistic approach is crucial for both landlords and tenants to assess the financial implications of a rental agreement. While gross rent might reflect the total payment without adjustments for concessions, and market rent would indicate the going rate without considering individual negotiations or promotions, effective rent effectively reveals the net financial impact of leasing a space. Fixed rent refers to a consistent payment amount over time but does not account for factors that may alter the overall cost perception for tenants. Thus, effective rent encapsulates the true economic impact of occupying a space in the real estate market.