Guides
Ghost kitchen lease costs in plain terms as of 2027
Ghost kitchen lease costs in 2027, with illustrative rates by market, the full occupancy formula, and the site checks to finish before signing.
What to take away
- Ghost kitchen lease costs land on your profit and loss as a fixed line. Add utilities, common-area charges, insurance, and the deposit and buildout spread over the term.
- Published 2027 asking rates run roughly $20 to $65 per square foot a year for a licensed commercial bay, and $15 to $45 an hour for a shared station. Treat both as illustrations, not quotes.
- Divide monthly occupancy by the orders a realistic month produces. Compare that per-order figure with contribution after commission.
- Confirm permitted use, ventilation, and late-night driver access in writing before signing. A broker's assurance is not a permit.
- Write your walk-away number before the first site visit.
A ghost kitchen agreement is a fixed cost the delivery commission never sees. Rent, license fee, or booked hours all land on the same line. What is left after commission has to cover it.
Illustrative 2027 rates by market
No two facilities publish the same structure. The table below is a starting range for comparison, not a quote. Shared-station hourly rates cover a bay and equipment. Per-square-foot rates cover a private licensed kitchen.
2027 Ghost Kitchen Rates by Market
Market
- Los Angeles
- $30-$65
- New York
- $35-$65
- Chicago
- $20-$40
- Houston
- $18-$32
- Atlanta
- $20-$35
Private bay / sq ft / yr
- Los Angeles
- $25-$45
- New York
- $28-$48
- Chicago
- $18-$32
- Houston
- $15-$28
- Atlanta
- $16-$30
Shared station / hour
- Los Angeles
- New York
- Chicago
- Houston
- Atlanta
| Market | Private bay, per sq ft per year | Shared station, per hour | Typical structure |
|---|---|---|---|
| Los Angeles | $30 to $65 | $25 to $45 | Monthly license, 12-month term |
| New York | $35 to $65 | $28 to $48 | Monthly license, CAM separate |
| Chicago | $20 to $40 | $18 to $32 | Gross or modified gross |
| Houston | $18 to $32 | $15 to $28 | Gross, shorter terms common |
| Atlanta | $20 to $35 | $16 to $30 | Modified gross, 24-month terms |
A 200-square-foot private bay at $40 per square foot is $8,000 a year, or about $667 a month before utilities. The same bay at $25 is $417 a month. That gap is the whole negotiation.
For a private bay, basic kitchen buildout often runs $10,000 to $75,000, depending on ventilation, grease, and utility upgrades. Shared stations usually include equipment, so buildout is closer to $0 to $5,000. Deposits commonly equal one to three months of base rent or license fee.
Utilities for a small high-draw kitchen typically run $300 to $1,800 a month. Common-area charges often add $2 to $8 per square foot a year. General liability insurance for a small kitchen typically runs $600 to $2,500 a year.
Full occupancy cost, in variables
For a monthly view of any facility:
- B: base rent, license fee, or booked hours times the hourly rate.
- U: utilities you pay directly, including any high-draw equipment surcharge.
- G: facility or common-area charges such as cleaning, waste, grease, security, and shared equipment fees.
- I: your monthly share of required insurance.
- D: deposit and buildout spread over the term. If deposit plus buildout is A and the term is n months, D is A divided by n.
- E: exit cost if you leave early, divided by the months you realistically expect to stay.
Monthly occupancy: M = B + U + G + I + D + E.
If B is $667, U is $400, G is $150, I is $100, D is $250, and E is $50, M is $1,617 a month. Those inputs are illustrative.
Occupancy per order
Estimate the orders a realistic month produces: orders per peak hour from your test weeks, times peak hours per week you can staff, times weeks. Call it Q.
Monthly Occupancy Formula
$1,617 | illustrative monthly occupancy M
M = B + U + G + I + D + E
B $667 base, U $400 utilities, G $150 CAM
I $100 insurance, D $250 deposit/buildout, E $50 exit
Occupancy per order is M divided by Q. Compare that with contribution per order C after commission, food, packaging, and labor, using the arithmetic in the site selection guide.
If M divided by Q sits close to or above C, that volume cannot carry the facility. Either Q rises, which is a demand question, or the facility is wrong. Run the comparison at pessimistic Q and expected Q.
For example, if M is $1,617 and Q is 1,500 orders, occupancy per order is $1.08. If C is $2.50, the order leaves $1.42 before other fixed costs.
Site requirements to confirm in writing
| Requirement | Who confirms it | What to get |
|---|---|---|
| Permitted use for food preparation at this address | Local building or planning department | Written confirmation, not a prior tenant's history |
| Health authority approval path for this facility class | The authority listed in the FDA's directory of state retail food codes and agencies | Which approvals the facility holds and which are yours |
| Ventilation, fire suppression, and grease handling for your cooking method | Fire marshal, building department, facility | Current certificates and whose duty maintenance is |
| Utility capacity for your equipment | Utility and landlord | Confirmation and the cost of any upgrade |
| Driver access and pickup point at night | Facility, plus your own visit at peak | Hours, parking, and how a driver finds the door |
| Accessibility of any customer-facing point | Building department, guided by the DOJ's ADA guide for small businesses | What barrier removal is readily achievable and whose job it is |
| Cold and dry storage for a week's delivery | Facility | Allocated space written into the agreement |
| Waste, grease, and recycling disposal | Facility or landlord and the local authority | Written arrangement and cost |
| Hours of access | Facility | Late-night access confirmed if your peak is late |
| Water and grease trap capacity | Utility, landlord, or facility | Written capacity limit and who pays for cleaning or repair |
Every row is a question with a written answer before signing. The how-to article on choosing a location walks the site visit that collects most of them.
Reading the agreement
- Term and exitwhat ends it, what leaving costs, and whether your stop rule can actually be executed under its terms.
- Escalationhow B, G, and U can rise during the term.
- Exclusivitywhether the facility can license a bay to a competing listing.
- Equipmentwhat is supplied, who maintains it, and what happens when it fails at peak.
- Insurancecertificate types, limits, and who is named.
- Assignmentwhether you can hand the bay to someone else if the concept fails.
The Small Business Administration's Business Guide covers commercial leasing among its launch topics. Use it for lease vocabulary, and the table above for what a food kitchen specifically needs.
Confirm in Writing Before Signing
- Permitted food-prep use at this address
- Health authority approval path for facility class
- Ventilation, fire suppression, grease handling
- Utility capacity for your equipment
- Night driver access and pickup point
- Cold and dry storage for a week
- Hours of access
The walk-away rule
Write it before the first visit. Set the occupancy per order above which you will not sign, and the requirements whose absence ends the discussion: permitted use, ventilation for your method, late access if your peak is late. Set the exit terms you will not accept.
Once due-diligence time and money are spent, every operator is tempted to sign anyway. The rule is what stops that. Put it in the business plan so someone else can hold you to it.
Where the numbers go next
Occupancy is the largest fixed line in the plan, and a second brand or wider radius is often meant to cover it. The expansion and market guide treats 'does the new format raise Q enough to lower M divided by Q' as a gate.
A facility that can only be staffed at peak by people who can reach it late matters as much as the rent. The hiring and training guide explains why late-shift staffing is a site question.
Common questions
How much does a ghost kitchen lease cost in 2027?
Published asking rates run about $20 to $65 per square foot a year for a private bay and $15 to $45 an hour for a shared station, varying by market. Your number is M divided by Q, built from your own quotes and test weeks.
Is an hourly kitchen cheaper than a bay?
Per month at low volume, usually. Per hour at high volume, often not, because the hourly rate climbs with the hours you book. Compute M divided by Q for both at your expected Q.
Can I rely on the previous tenant having had a restaurant?
No. Permitted use and approvals are confirmed for your operation, in writing, with the building department and the health authority. A prior tenant's history is not a permit.
What is the most missed cost?
Deposit and buildout spread over the term, D, plus exit cost E. Both are invisible in a monthly rent figure and both are real.
