How do I calculate the weighted average?

Question

Two spaces in a commercial real estate development..

Space 1 = 1,100 square feet and leases at $25 per sq foot

Space 2 = 2,711 square feet and leases at $22.95 per sq foot

What's the weighted average rent per square feet of the combined spaces?

Thanks.

Answer 1

Good question, a real thing that happens!

Take each space and multiply the sq ft by the rate to get the total rent for that space

Space 1 = 1100  * 25 = 27,500

Space 1 = 2,711 * 22.95 = 62,217.45

Add the two spaces together for the total space and the two total rents together for the total rent

Total space = 1100 + 2711 = 3811

Total rent = 89,717.45

Now just divide the total rent by the total space and you get your answer

= 89,717.45/3811

=$23.54

Answer 2

Total space = 1100+2711 = 3811 ft^2

So space 1 = 1100/3811 = .289 of the total space

Space 2 = 2711/3811 = .711 of the total space

So weighted average = .289(25) + .711(22.95) = $23.54

Answer 3

=[(1100*25)+(2711*22.95)]/[1100+2711]

=[27500+62217.45]/3811=23.5170821

Answer 4

It's easier than you think: just multiply the cost per sq ft by the num of sq ft and divide that value by the num of sq ft:

weighted avg of entire space = (1100*25 + 2711*22.95)/(1100  + 2711)

= (89 717.45)/(3811)

'= 23.54

Answer 5

Space 1: 1100 * $25 = $27,200

Space 2: 2711 * $22.95 = $62,217.45

Total cost: $89,717.45

Total square feet: 1100 + 2711 = 3811

Weighted average rent / square foot = $89717.45 / 3811 = $23.54

note that is is weighted toward the space with the greatest area