THE COMMON FACTOR
RENTABLE VS. USEABLE SQUARE FEET
WHY DO YOU PAY RENT FOR MORE STACE THAN
YOU CAN OCCUPY?
Few commercial real estate concepts are as misunderstood by
tenants and even real estate professionals, as the measurement
of office space square footage for rent purposes. The formula to
determine the amount of rent in most office leases incorporates
both the usable square footage, plus the tenant’s proportionate
share of common areas in the building.
USEASBLE SQUARE FEE T
In general, usable square footage is the amount of space you
actually inhabit. For smaller tenants, useable square footage is
simply the area of the demised space inside your office suite with
no exclusions for recess entry/exit doors or structural columns.
What that means in essence, is that the space is measured as if
columns are not there. But restrooms and janitor closets, elevator
lobbies and public corridors are there, and you pay a portion of
the space they occupy with the other tenants who use them.
For full floor or multi-floor tenants, useable square footage is
everything inside the glass line, including restrooms, janitor
closets or mechanical and electrical rooms. Like small tenants,
full-floor or multi-floor tenants also must pay a share of the
building common areas not on their floor, such as the main
THE COMMON AREA FAC TOR
The common area factor is a number which refers to shared
spaces on a single floor, and within a building in its entirety.
These spaces as previously mentioned can be a pro-rata share
of tenant common areas such as restrooms and elevator lobbies,
or main building lobbies and amenities which all tenants of the
The Floor Common Area Factor refers to tenant common areas
on that floor only, and although the number varies from building
to building, it is generally near eight percent of the floor for a
factor of 1.08.
The Building Common Area Factor refers to common areas
for all the tenants in the building, and can range from six to
eight percent. Common area factors determine the actual square
footage for which a tenant will pay rent.
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 are factor.
As a result for most office buildings the total common area factor
ranges from 12 to 20 percent subject to the design of the building.
RENTABLE SQUARE FEET
Simply stated, rentable square footage is the area of the enclosed
interior space of the building other than holes in the floor, such
as stairwells, and elevator and mechanical duct space. If it’s floor
that you can stand on, you pay for it, because it is rentable space.
That includes restrooms, janitor closets, electrical and telephone
rooms, etc. What you pay for then-your rent--is the rentable
square footage times the lease rate per square foot.
To calculate rentable square footage for a smaller (less than
full-floor) tenant, first multiply the usable square footage by the