Beyond the Walls: Calculating Square Footage

When leasing commercial spaces, understanding the intricacies of square footage calculations is crucial for both tenants and property owners. The process of calculating square footage involves more than measuring the inside of the space. Several factors come into play, including usable vs. rentable square footage, load factors, and determining if outdoor spaces like patios and balconies are included.

The Building Owners and Managers Association (BOMA) provides guidelines to standardize these measurements, ensuring transparency and fairness in commercial real estate transactions; however, these standards are not always widely known by all parties looking to lease space.

Before you embark on touring and negotiating commercial space, here's a quick guide to help familiarize yourself with all aspects of calculating square footage.

Usable vs. Rentable Square Footage

• Usable Square Footage: Refers to the actual space within the walls of a commercial unit exclusively designated for the tenant's occupancy. Knowing the usable square footage is crucial, especially if your business involves large equipment or has other requirements impacted by the space's measurements.

• Rentable Square Footage: Represents the total space a tenant occupies in some form. In commercial leases, the square footage is most often listed by the rentable square footage. It is calculated by taking the usable square footage and adding some or all of the following: the exterior walls of the space, a load factor, and outdoor spaces exclusively used by the tenant.

Load Factor

The load factor is the percentage of the building that is common area, such as hallways, elevators, and restrooms. It most often applies to office spaces but may exist in any commercial building where the tenant shares some common space with others. On average, office buildings have a load factor of around 20%. Buildings with many common amenities, such as shared conference rooms, kitchens, or gyms, will have a higher load factor.

Load Factor = Square footage of common area / Square footage of tenant suites

As a tenant, you will pay for these amenities in your rentable square footage. If they are not amenities you would use, it may be worth considering other buildings.

Balconies and Patios in Square Footage Calculations

The treatment of patios and balconies when calculating square footage for commercial spaces can vary and is subject to negotiation. In some cases, landlords may include all or a portion of the patio as part of the rentable square footage, or charge an additional fee for the exclusive use of this amenity. This is often done if the patio is enclosed, climate-controlled, or is a selling point of the space.

If a balcony or patio is included in the space you are looking at, it is worth inquiring if the square footage has been added to the rentable square footage of the space.

Understanding the nuances of square footage calculations in commercial spaces is vital to optimizing your use of the space and ensuring that you only pay for amenities you genuinely need. If you have any additional questions or concerns, feel free to reach out.