ft. That’s a difference of 412 sq. Load factors are most commonly represented by a percentage, usually ranging between 10% and 50%. Rentable Square Feet is the metric that you pay for. Common areas may include lobbies, hallways, restrooms and are available to anyone, as well as conference rooms and spaces that can be shared amongst other tenants. Load factors can vary between 12% and 25%; high-rise office buildings typically have a …
But, it can also be an indication that the buildings have very different gross-ups. ›.
ft.. It is essential that you have a general understanding of what these words mean, and the difference between them, because all three play a role in calculating the rent that you’re paying. Office space is generally listed with a rentable square footage rate, which includes more square feet than the actual space the tenant will occupy. It includes USF and a portion of building-common spaces. To calculate rentable square feet, landlords use the so-called Load factor (also known as a common area factor or add-on factor). Let's assume a building is 100,000 square feet in size and the common area that can be used by all building tenants is 15,000 square feet of the total square footage. So, your ‘rentable area’ is your usable area plus your proportionate share of the common areas of your building. If you look at the rent you pay relative to your usable area, you will realize pretty quickly that you’re paying for more space than you have in your suite. Using the example from above, the 9% difference in the Gross-Up may be a result of inefficient building design. When you are looking for new office space, you will be working with a CRE broker who will walk you through situations like this, but it’s always better for you to be prepared and have some insight. This also applies to other useless spaces in a practical sense like recessed entries. USF is used in interior design and space planning, since it is a direct measure for how much space an architect or space planner has to design within. If a company wants to lease 5,000 usable square feet, then this number would be multiplied by the load factor of 1,15 to get the number of rentable square feet: Tenant Usable Square Feet x Load Factor = Tenant Rentable Square Feet The actual square footage of the tenant’s space is called the net rentable area of the space. Several “players” in the real estate market have a stake in how space is measured. Knowing the distinctions will help you ensure that you’re getting the best possible deal on office space as well, and you can estimate how much space you will get with more accuracy. ft. and the total area of your building is 100,000 sq. How to keep your workforce engaged while working remotely?
That means the building has a common area factor of 15%. Being able to differentiate usable and rentable square feet is essential if you want to know how much space you’re really going to get when you rent an office. Usable area, common area, rentable area, and gross-up are all terms you will hear in the world of commercial leasing. That space is where your desks, furniture, equipment, meeting rooms, etc will be in. This means the RSF you pay for could shrink or expand in the long run, even if nothing in the actual building changes! Can a building owner predict how much each company on one floor or in a building will utilize in the common areas? That number will also get multiplied by the load factor of the building. ft. and the usable area of the building with a 19% gross-up factor would be 5,042 sq. The building lobby, elevator lobbies, and fitness center in the basement, for example, aren’t a part of your office suite, but the landlord still wants you to pay for your portion of those spaces. ft. office space that you are looking to lease probably isn’t really 5,000 sq. The term “usable” is not entirely true given the fact that square footage occupied by columns is still technically considered to be usable square feet. The landlord calculates tenants’ usable sqft times the proportion of space that tenant occupies on the floor, to get the floor’s rentable sqft number. ft. and the gross-up is 12% (12% of the total building area is common space); your rentable area would be: Have you ever toured office spaces that are roughly the same rentable area but feel different sizes? For example, you couldn’t carpet the area that is occupied by a column or window sill, so even though you pay for this space in your rent, USF does not include these non-carpetable areas.
ft. ft., the gross-up of the building would be 12% (12,000 sq. So, the building’s common areas include the entrance lobby, elevator lobby, corridors, washrooms, shared boardrooms, gyms, building showers, electrical rooms, janitor closets, elevators, stairwells, etc. SF – a square foot, 12 inches by 12 inches. Your ‘usable area’ is the space that you occupy; it’s for you and your company’s use alone. So, that 5,000 sq. That obviously includes all the office areas that will be available for your company and employees to work in. We know that the commercial real estate world has its own, oftentimes confusing, language. The renters will pay for the common area spaces in proportion to the amount of usable office space they are renting. In simplest terms, USF = NSF + Circulation. It is essential that you have a general understanding of what these words mean, and the difference between them, because all three play a role in calculating the rent that you’re paying. Architects and interior designers need to know how much space there is available for placing furniture. The gross-up factor is then multiplied by your usable area to calculate your rentable area. ‹ Do You Know Your Buildings Rules and Regulations? 5,000 usable square feet x 1.15 = 5,750 rentable square feet. ft.). To put that difference in the usable area into perspective, that’s enough space for two additional large offices, a generous kitchen, a meeting room, or six work stations. Thus, that 5,000 sq. Engineers and regulatory bodies need to know how much space there is for code compliance and construction. Although not a technical term, you might also hear the USF referred to as Carpetable Area, since this is the amount of space you could apply carpet to. And Landlords need to know how much space there is so they can charge rent for it. The bottom line is: the rentable square footage (RSF) is the square footage you pay rent on in your lease. Typically when you are quoted a common area factor by the landlord or the building’s leasing agent it includes the sum of the floor common area factor and the buildings common area factor.
At any rate, a Real Estate Professional can help you navigate the peculiarities of your market (we haven’t even mentioned International standards!). When you are budgeting for your new office space, be sure to take into account the difference between the gross Leasable area of your space and the net rentable area. If your space is 5% of the total leased area of the building, you’re going to pay for 5% of the lobby every month, as well as 5% of the bathrooms, hallways, washrooms, and all other common areas. Here’s the formula used to calculate your rentable area: So, if your usable area is 5,000 sq. please send me an email at. and all of the circulation that is needed to accommodate those items in an actual layout, you end up with USF. When you’re viewing an office space in person, take notes of such areas and subtract them from the usable square feet number you’ve been given. Knowing the difference between usable square feet and rentable square feet can mean all the difference in evaluating the best deal on a commercial lease.