Rentable and Usable Square Footage What is the difference
Many times I show office space and the landlord will tell the tenant the square footage is far more area than the actual square footage occupied. Sometimes office tenants have trouble understanding why they are paying for more square footage than they actually occupy.
Usable Square Feet
This is the square footage that the tenant actually uses within their office space. The measurement is from the outside of the glass window wall to the middle of the sheetrock walls of the space. From a tenant's perspective, this is the area that they have no problems paying rent for because this is the office space that they actually occupy.
Rentable Square Feet
If a tenant leases office space in a multi-tenanted building they are using areas of the building that they must have to operate their business. These areas include public places like the building's lobby, restrooms, corridoras, elevators, and stairwells. They also include areas that tenants don't normally see but they are important for the operation of the building. These areas include electrical and mechanical rooms, janitorial closets and other areas associated with the physical operation of the office building.
The way that an office landlord is able to recover the expenses associated with square footage outside of the tenant's usable square footage is by applying a common area factor to the usable square footage. The new square footage is what is commonly referred to as rentable square feet.
The standard square footage calculations in the commercial real estate industry are called the BOMA Standard. It is important for an office tenant to have an acceptable method of calculation in their office lease. Landlords like to use the word approximate square footage in the lease. A better solution is to have a standard for the calculation of square footage in the lease. This way there is no question how the actual square footage is determined.
Now that you have this information you may use it during your office space search. As you tour office buildings you may ask the landlord's broker what is the common area factor that they use to determine the rentable square footage and how is it calculated. With this information, you may compare different building and may be able to have less rentable square footage in another building but the same amount of usable square footage.
If you are leasing office space in Frisco Texas some of the office buildings are leasing for $50.00 per rentable square foot. If you find an office building with a core factor of 18% and another building at 14% you can realize rental savings. If you required 15,000 usable square feet one building will require 17,700 and another 17,100 rentable square feet. With a typical five year lease, the savings could be $150,000.
Don't allow yourself to fall into the trap of paying for more square footage because of the way rentable square feet are calculated or that a building has an inefficient design. There are other ways that you can reduce your office rental expense. We help Dallas, Frisco, Plano, and Richardson office tenants every week to find the ideal office space. Contact us if you have any questions about Rentable or usable square footage calculation or if need help finding the perfect Dallas office space.