The budget narrative will need to orient the reviewers to the trade-off in direct/indirect costs with the use of rental space and reassure them that you will not be cut off from the excellent research resources of the University.
Budget Narrative Example
The research will be conducted at a leased, off-campus site [name site if known]. The indirect cost rate for this application is XX% [list current off-campus IDC rate] rather than the XX% [list current on-campus IDC rate] on-campus rate.
[If the site is not yet rented, indicate that rentals are handled through the University rental office which coordinates best-value leases and rates.]
The University lease for this space equates to $XX per square foot and thus the requested annual rent is $XX. It should be noted that indirect costs are NOT charged on the rental amount. Telecommunications and furnishings that would have been provided by the University through on-campus indirect cost recovery are appropriately included in the rental costs and will assure full communication with the resources on the campus proper. Had this project been conducted on campus with an IDC rate of XX% [list current on-campus IDC rate], the Indirect Costs to the grant for year 1 would have been $XX versus $XX in this leased space. Thus, using leased off-campus space saves the NIH approximately $XX in year 1 alone. Similar savings occur for each of the subsequent years. [Include only if the overall cost savings are present - this will vary with the leasing costs]