What does net effective rent consider that market rent typically does not?

Net effective rent takes into account several factors associated with the lease, particularly items of value that may influence the overall cost of occupying a rental space. This includes concessions offered by the landlord, such as free months of rent, discounts, or other incentives that effectively lower the cost of renting over the lease term.

While market rent typically reflects the current rental rates based on supply and demand dynamics, it does not necessarily capture the impact of these incentives, which can significantly change the effective cost to the tenant. Therefore, net effective rent provides a more comprehensive view of the financial implications of leasing by factoring in these additional items of value, thus giving both landlords and tenants a clearer understanding of the true cost of occupancy.