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Useable Square Footage versus Rental Square Footage

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Today's Tenant Rep Tuesday Tip topic: Useable Square Footage versus Rentable Square Footage, The Loss Factor

What is useable square footage versus rentable square footage?

The difference between usable square feet and rentable square feet is used to calculate a tenant's annual rent expense for their lease.

Useable Square Footage:

The usable square footage of a space is defined as the total area specific to the tenant. This is the space specifically set aside for your company’s use. Once you walk into your office/suite, that area inside is considered usable square feet.

Rentable Square Footage:

Rentable square footage is defined as the usable square footage plus a portion of the building’s common area.

Common areas are the spaces within a building usable by all tenants such as hallways, lobbies, public restrooms, and fitness facilities.

The identifying difference between usable square footage and rentable square footage is that rentable square feet, not the usable square feet, will be used to calculate your annual rent expense. 

Loss Factor:

A helpful tool that tenants and landlords use to understand the difference between a building's rentable square footage and usable square footage is called the loss factor. This number is based on the percentage of common areas found in the building (recall some of the common area spaces within the building). Loss factor is calculated by dividing the building’s total rentable square feet by the total usable square feet.

Total Rentable SF ÷ Total Usable SF = Loss Factor

 
 

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