How Space is Measured
While all properties use the square foot as the basis of measurement, which
parts of the property are included in the final calculations vary by building
type. Gross square footage is most typically used with warehouses, industrial
buildings and other stand-alone buildings, such as freestanding retail sites.
Typically, the calculation will include the thickness of the sidewalls when
measuring the total footprint of the site. When measuring multi-tenant
warehouse, industrial and retail property, the inside measurement may be the
most appropriate. This measurement will include 50% of the thickness of any
demising walls.
Office buildings use substantially different calculations. The actual square
footage that an office user may occupy is typically less than the amount upon
which the rent is based. The square footage that you use exclusively is termed
"usable square feet" and the amount upon which the rent is based is called
"rentable square feet". This is because office tenants pay their proportionate
share for their use of building common areas. Common areas include lobbies,
hallways, rest rooms, and service areas. The differential is expressed as a
percentage known as a load or loss factor. When comparing properties, it's a
good idea to ask, "What is the load factor?"The higher the load factor the
more of your space will be in the common areas and less inside the suite for
your exclusive use. Occasionally, one may find a building that bases the rent
upon the usable square footage. Since load factors can run 17 to 22 percent,
this may represent real savings.
The above is an excerpt from Navigating Commercial Property Leases
by Bob McComb. For more information about this book, please
click here.
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