Commercial Office Building Break-Even Analysis: $133K Monthly Revenue

Fixed costs $43.0K Monthly overhead

Contribution margin 100% After variable costs

Break-even revenue $43.0K Base revenue need

Break-even timing Month 26 Model break-even

Break-even calculator

Test whether monthly rent covers variable costs and the fixed monthly cost base in each operating stage.

Lean Base Full

Monthly revenue Use the rent you expect to collect each month from occupied space. $ Low rent High rent Variable expenses Use costs that rise with occupancy or leasing activity. $ Low direct costs High direct costs

Money available to cover fixed costs $225,000 $225,000 revenue - $0 variable expenses

Margin ratio

100%

Covers fixed costs

Yes

Fixed monthly costs Use the monthly cost base the building must cover before profit starts. $ Light overhead Heavy overhead

Break-even chart Revenue Total costs

Which office building expenses are fixed, and which move with leasing volume?

Cost classification

Break-even only works if fixed overhead stays separate from sales-linked costs. Here, recurring overhead is mostly fixed, payroll steps up with staffing, and the $20.0 million purchases, $5.8 million construction budgets, and $280,000 setup capex stay out.

Expense	Cost	Break-Even Treatment	Common Mistake
Property Management Fees	Fixed	Include $15,000 per month in overhead from Month 1 through Month 60.	Tying the fee only to occupied suites.
Portfolio Insurance	Fixed	Include $8,000 per month from Month 1.	Deferring insurance until lease-up.
Common Area Utilities	Fixed	Include $6,000 per month even during vacancy.	Dropping utilities when occupancy is low.
Corporate Office Rent	Fixed	Include $7,000 per month as company overhead.	Allocating it only to individual properties.
Marketing & Branding	Fixed	Include $3,000 per month during lease-up and stabilized operations.	Cutting it from break-even until tenants sign.
Legal & Accounting Fees	Fixed	Include $4,000 per month in recurring overhead.	Treating recurring compliance as one-time setup.
Payroll	Semi-fixed	Include staffing steps: about $25,208 per month in Year 1, rising to $45,000 per month from Year 3.	Using Year 3 payroll in Month 1, or not stepping it up.
Rented-Site Obligations	Fixed	Include $45,000 per month once all rented sites are active.	Netting site rent against tenant rent revenue.

How does break-even shift from a lean launch to a base buildout and a full portfolio?

Scenario table

With no variable costs in the model, break-even moves almost entirely with monthly rent and staffing. Lean barely covers overhead; base and full cases widen the cushion as more leased space comes online.

Planning assumptions only; actual occupancy, concessions, and lease timing can move break-even.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch case	$75,000	$0	$68,208	100%	$6,792	Just above break-even, so the cushion is thin.
Base month-26 case	$285,000	$0	$133,000	100%	$152,000	Comfortably past break-even with a solid monthly cushion.
Full portfolio case	$395,000	$0	$133,000	100%	$262,000	Strong break-even cushion once the portfolio is fully built out.

What breaks the break-even plan for this commercial office building?

Stress test

Break-even lands around $133,000 a month before debt, taxes, and capex. The plan has a wide cushion at full revenue, but vacancy, slower tenant move-ins, and cost creep can narrow it fast.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change. Full revenue stays at $395,000.	$133,000	$262,000 cushion	Strong buffer, but leasing delays are the first threat.
Revenue shortfall	Full revenue falls 20% to $316,000.	$133,000	$183,000 cushion	A 20% drop still clears break-even, but the buffer shrinks.
Fixed-cost pressure	Fixed costs rise 10%.	$146,300	$248,700 cushion	Overhead growth hits cash fast, so control property costs.
Margin pressure	Variable expenses rise 10%.	$147,800	$247,200 cushion	Utility and service creep can push the threshold up.
Combined pressure	Full revenue falls 20% and fixed costs rise 10%.	$146,300	$169,700 cushion	Lower occupancy plus higher overhead still leaves cushion, but it gets thin.

What should you verify before you commit to the next office building purchase or lease?

Founder checklist

Test each new commitment against the break-even path, not just the deal itself. If tenant demand, rent, payroll, and cash do not hold through Month 26, the next property can push the portfolio deeper into the red.

1Tenant DemandMonth 3-23

Validate broker-backed tenant demand before each acquisition and build spend, or the staged openings from Month 3 to Month 23 will outrun occupancy.

2Rent Stack$25K-$90K/mo

Prove each site can lease inside the modeled rent band, because break-even depends on hitting monthly fees between $25,000 and $90,000.

3Fixed Load$43.0K/mo

Check that recurring property overhead stays covered in the early ramp, since management, insurance, utilities, office rent, marketing, and legal and accounting total about $43,000 a month.

4Hiring Ramp$25.2K-$45K/mo

Stage payroll with lease-up, because the model rises from about $25,208 a month in Year 1 to $45,000 a month at full staffing.

5Break-Even TimingMonth 26

Do not add new fixed commitments until Month 26 looks real, because the portfolio should be near break-even before the next layer of overhead lands.

6Cash Cushion($19.0M)

Keep cash for the 6- to 10-month construction windows and the worst trough near negative $19.0 million in Month 59, or the ramp can stall before rent catches up.