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When it comes to multi-tenant office buildings, the number of square feet tenants pay for is usually greater than the amount they actually use. That’s because landlords add a portion of the common areas, such as, hallways, lobbies, public washrooms and mechanical closets.

The “rentable” square footage on most leases includes a portion of the common areas. The space tenants can spread rugs on and set up desks is called “usable” square footage. The difference between them has two names, depending on how you do the math, and the results are not interchangeable.

If you have 10,000 square feet of usable space and add 1,500 more of common space, that’s a 15% “add-on” factor. However, if you start with 11,500 square feet of rentable space and subtract 1,500 of common space, that’s a 13% “loss” factor. A 15% loss factor would leave you only 9,775 square feet of usable space. To make it worse, “load factor” is often used to mean either a loss or an add-on, so it is important to know how the common space factor is arrived at when comparing space in different buildings.

It’s also important to make sure landlords use a standard method of measuring space such as the Building Owners and Managers Association (BOMA) guideline. Although tenants typically focus on rent/square foot, the actual square footage calculation methodology can have significant implications on monthly rent owed. By demanding an industry standard measurement (like BOMA) for your space, you can generally ensure that your landlord is not manipulating your square footage measurement in order to artificially inflate your rent.

 

Make sure you understand the square footage measurements on your next lease. Your tenant representative needs to make sure you are not paying more than your fair share.

 

 

No Obligation Lease Evaluation.   Ryan Richmond 248.470.8533  

 

 

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