Warehouse Lease vs Buy Calculator — Property Decision Analysis

Compare the total cost of leasing vs buying warehouse property. Monthly cash flow, NPV, appreciation, and opportunity cost — find the right answer for your balance sheet.

Quick answer: Buying warehouse property typically breaks even vs leasing in 7–12 years. Annual rent vs mortgage payment is similar, but ownership builds equity. Key question: is capital better deployed in core business?

🏭 Warehouse Lease vs Buy Calculator

Warehouse Size (sq ft)

Lease Rate ($/sq ft/year)

NNN — you pay taxes, insurance, maintenance on top

Purchase Price ($)

Down Payment (%)

Commercial Mortgage Rate (%)

Loan Term (years)

Annual Property Appreciation (%)

Comparison Period (years)

Recommendation

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Lease Total Cost

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Buy Net Cost (after equity)

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How to Use This Calculator

Enter lease rate and purchase price — get current market comps from a commercial real estate broker.
Enter mortgage details — commercial real estate loans typically require 20–30% down and carry 6.5–8% rates.
Set appreciation expectation — industrial property has appreciated 5–12%/year in major markets recently. Use 3% for a conservative long-term estimate.

Worked Example

50,000 sq ft, $9.50/sq ft NNN lease, $4.5M purchase, 25% down, 7% mortgage 20yr, 3% appreciation, 10-year comparison.

Annual lease: $475,000 + $90K NNN = $565K/yr
10-yr lease total: $5,650,000
Down payment: $1,125,000
Mortgage payments (10yr): $3,948,000
End equity (10yr at 3%): $2,546,000
Buy net cost: $3,417,000 — Buying wins by $2.2M

Buying wins significantly over 10+ years when appreciation is factored in. The critical question: does locking up $1.1M in a down payment serve your business better than deploying that capital into growth?

Frequently Asked Questions

Lease when: capital is better deployed in the business (e.g., 30%+ ROE operations), market is uncertain, flexibility for growth/contraction is needed, or you operate in multiple markets. Buy when: you need a long-term (10+ year) primary facility, the property has strategic value, or commercial real estate in your market is appreciating rapidly.

Triple net means the tenant pays property taxes, building insurance, and maintenance on top of base rent. Most industrial/warehouse leases are NNN. Add 15–25% to the base rate to estimate total occupancy cost.