Rentable vs. Usable Square Feet
The first step in appraising a commercial property is to determine the total rentable square feet. This may seem like a genuine calculation; unfortunately, it does not end up being very simple. This is specifically true for multi-tenant buildings.
To determine the rent in maximum office leases includes both usable square feet along with tenant’s proportionate share of common areas in the construction.
What is a rentable and usable square feet?
When estimating the size of a space for lease, start with the measurement of usable square feet. This is the area of a building occupied by the tenant. It is the calculation of the space available for only the tenant’s use and is not accessible by other tenants. It is measured from the portion of the exterior walls and windows to the middle of walls.
Once the usable square feet are established, a common area factor is added to the measurement. Common Area Factor is the shared space on tenant’s floor and the areas of a space that services the whole property like lobbies, access corridors, public restrooms, public restrooms, conference centres, fitness centres, and loading areas. Stairs, elevator shafts, and utility runs, is not calculated within common area factor. Architects use a method referred to as Building Owners and Managers Association International to calculate the common area factor.
Rentable square feet is a combination of usable square feet and common area factor. This is the square feet the tenant actually pays rent on and should be studied when comparing different buildings.
The commercial real estate advisor provides you with the necessary guidance and ensures the best deal possible with the highest value per usable square foot.