Useable vs. Rentable Square Footage
2 min read
When it comes to commercial real estate, the size of the property matters. Whether you are an investor looking to add office space to your portfolio or a business owner searching for a suitable property to run your business out of, it is important to know how much space you are working with. Establishing an office lease agreement is a crucial determinant for both the lessor and lessee.
The size of the building is typically broken down into usable and rentable square footage. So, what’s the difference between the two? Find out below.
Rentable Square Footage
Rentable square footage comprises the useable square footage and a percentage of the space of all shared areas in the building. These common areas can include anything from hallways, lobbies and restrooms. The rentable square footage is used to calculate the rent in lease agreements that require the tenant to help contribute to the cost of maintaining the shared areas of the building. The commercial real estate industry typically follows The Building Owners and Managers Association (BOMA) standard to calculate the floor area so that property owners and landlords can accurately calculate floor area.
Useable Square Footage
Useable square footage is the space that the tenant will physically occupy. It includes all the square footage of the area being leased. Your useable square footage can be calculated by multiplying the length by the width of the entire space—this will determine how much useable space you have.
When securing an office lease or investment, it is essential to consider both the useable and rentable square footage to determine whether the space is the right fit for your business. Working with a knowledgeable commercial real estate professional will ensure all your bases are covered, and all parties remain satisfied.
References
Catalano, D. (n.d.). Understanding usable vs. rentable square footage: What's the difference? iOptimize Realty. Retrieved October 3, 2022, from https://www.ioptimizerealty.com/blog/usable-rentable-square-footage
Di Meglio, V. (2015, September 1). Office space 101: Rentable vs. Usable Square Footage. Colliers. Retrieved October 3, 2022, from https://www.colliers.com/en/news/office-space-101-rentable-vs-usable-square-footage
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