Tuesday, December 6, 2011

Leaseable vs. Usable (Square Footage)

Next segment in our Leasing Series…Leaseable vs. Usable (Square Footage).

This concept is often times misunderstood by Tenants - that is the idea that LEASABLE SPACE DIFFERS FROM USABLE. Typically this is the case whether we are talking about a freestanding building (for one occupant)or multi-tenanted commercial complex.

In a single user tenancy within a freestanding building, the entire building envelope becomes the leasable amount. For instance, if the building dimensions based on a perimeter measurement are 25’ x 100’, its leasable area is deemed to be 2500’. But if you actually calculate the floor area which you can actually stand on (or use), it is less by the width of the wall sections on all 4 sides. Depending on the building’s construction, this can make for a reduction of 100’-150’.

In the case of a multi-tenant complex, the above determination becomes a bit more complicated. The term ‘common area factor’ comes into play, and it refers to an add-on for shared spaces on a single floor or within a building entirely. These spaces would include lobbies, bathrooms, hallways, and utility closets. It can add as much as 8-12 percent, depending on the extent and size of the common areas within the building. Again, the reality is that the Tenant pays for a percentage of space, above and beyond the actual usable floor area within their actual unit.

In terms of an acceptable measurement standard, one of the most widely used is the BOMA Standard, which is well recognized throughout the commercial real estate world. If used, it becomes the official square footage measuring tool and certifies both the ‘leasable’and ‘usable' square footage for the premises.

Again seek out experienced commercial realtors with strong leasing backgrounds, to assist you in determining ‘leasable vs. usable’ considerations, as well as ‘common area factors’ which may apply in your property search.

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