Keyes Commercial Building Lobby
Evaluating the best deals on any commercial properties includes understanding the difference between rentable and usable square feet of the real estate property. In general, office space is advertised as rentable square feet which is higher than the actual amount of office space that the actual tenant can or will occupy.
Usable Square Feet
This is the actual area that a tenant will occupy in running his business. In the case of a partial floor lease, such space will include the office space and any private restrooms and storage space. There will be no exclusions for recessed entries, columns, or any other similar space. As an example, column space is often considered fair game when coming up with the total amount of usable square feet. In a case where a tenant will occupy an entire floor, the usable square feet will be everything that is inside the building’s boundary floor, less any stair ways and elevator shafts. Unusable spaces such as electrical and mechanical rooms, janitor closets, hallways, kitchenettes, receptions and private bathrooms are considered as usable square feet.
Rentable Square Feet
A commercial real estate building is made up so much more than cubicles and private offices. There are lobbies, meeting spaces, corridors, restrooms and stairways. These are all used by tenants and landlords will normally charge for their use. Rentable square feet therefore refers to the total amount of usable square feet as well as the pro-rata share of the common areas in the building. Pro-rate basically means that tenants will pay a proportionate amount to the amount of space they lease/occupy in the building.
Load Factor
Landlords use a load factor in order to calculate the total amount of rentable square feet. Load factor can sometimes be referred to as an add-on factor or common area factor. Load factor is a percentage that is based on the building’s common areas. For example, if a building has a total of 10,000 square feet, and of these, only 8,000 usable square feet, then this means that 2,000 sq. ft is reserved for common areas and the load factor would therefore be 1.25. (load factor = rentable square feet / usable square feet)
The load factor is calculated for each individual tenant to come up with an appropriate total rentable square feet value. (i.e total rentable square feet = load factor * total usable square feet)
This formula is important in determining the best ideal office space for a company. Buildings with a lower load factor can save a company a lot of money, but on the other hand, a company may decide to incur the expenses associated with a large and fancy lobby area and kitchenette. Knowledge of a building’s load factor allows tenants to make intelligent decisions about the value of a building and their investment. Load factor is normally represented as a percentage.
Building Owners and Managers Association International (BOMA)
Most landlords and lease agreements use BOMA standards when measuring buildings. Leases should mention whether the buddings measurements were taken according to the Building Owners and Managers Association Standards. It is advisable for tenants to hire an independent professional to verify any given measurements . As expected errors do occur and they can end up costing you a lot of money during the tenure of a lease agreement.