What Is Price Per Unit and Price Per Square Foot?
Two properties selling for $3,000,000 each are not comparable unless you know what you’re buying per unit. Enter price per unit and price per square foot — the normalized benchmarks professionals use to compare deals instantly.
Two properties selling for $3,000,000 each are not comparable unless you know what you’re buying per unit. Enter price per unit and price per square foot — the normalized benchmarks professionals use to compare deals instantly.
Price per unit is used exclusively in multifamily. A 50-unit apartment building asking $5,000,000 has a price per unit of $100,000. A 20-unit building asking $2,600,000 is asking $130,000 per unit. In seconds you know the second building is 30% more expensive on a per-unit basis, even though the total price is lower.
Price per square foot ($/SF) is used across all commercial asset classes: office, retail, industrial, and mixed-use. A 20,000 SF retail center asking $4,000,000 is priced at $200/SF. Market comps for similar retail in that submarket might average $185/SF — telling you the asking price is 8% above market on a per-SF basis.
These benchmarks are calibrated against market comps. When you’re underwriting a deal, you should know the current $/unit or $/SF range for the asset class and submarket. You get this from broker databases, appraisal reports, and recent transaction data. Without comps, these numbers float in space. With comps, they become your fastest sanity check.
One nuance: price per unit says nothing about unit quality. A $120,000/unit comp in a Class A building with 900 SF units is not the same as a $120,000/unit asking price for a Class C building with 500 SF studios. Always layer quality and size context on top of the unit metric.
Learn this properly
Price Per Unit and Price Per Square Foot is one of the core numbers in commercial real estate. The Language of CRE course teaches it alongside every other metric you need to read a deal, with worked examples and practice questions.
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Common questions
What is Price Per Unit and Price Per Square Foot?
Two properties selling for $3,000,000 each are not comparable unless you know what you’re buying per unit. Enter price per unit and price per square foot — the normalized benchmarks professionals use to compare deals instantly.
Why does Price Per Unit and Price Per Square Foot matter in a commercial real estate deal?
Price per unit is used exclusively in multifamily. A 50unit apartment building asking $5,000,000 has a price per unit of $100,000.
Related terms
[Rent Escalations](/rent-escalations/) · [The Due Diligence Documents You’ll Hear Named](/the-due-diligence-documents-you-ll-hear-named/)
Educational definition only. Not investment, financial, or brokerage advice.