It stands for fair market rent; the amount a landlord/ lessor would expect tenants/ lessees to pay each month against demised premises. In other words, it represents the annual amount per square foot that a willing tenant/ lessee would pay to a willing landlord/ lessor in arm’s length transaction. Fair market rent depends on market forces (supply and demand) and market condition (the pricing dynamism in a given market).
Fair market rent is also determined based on what tenants/ lessees pay for comparable properties in the same market.
It is alternatively known as fair market rental value.
