How is Commercial Office Space Measured?

Do you know if you are overpaying for your lease based on the space in your commercial building? Most tenants are unaware if they are overpaying because the guidelines for measuring commercial space are developed in the landlord’s favor, not the tenant’s. How do you measure commercial office space to know if you are being fairly charged or paying for a lost use of space?

 

The Guidelines

There are two elements in measuring commercial office space: useable space and rentable space. Useable square footage (USF) is known as the space you occupy as a tenant – this represents only one portion of your lease. Rentable square footage (RSF) is a combination of the square footage from the usable space and the common area space. Common areas are shareable parts of the building that all tenants use. For instance, lobbies or stairs qualify as common areas because all tenants benefit from the shared space. You will have to determine which calculation method is best for you when it comes to using load factors. The Building Owners and Managers Association (BOMA) has several guidelines landlords must abide by. Though the guidelines are developed in the landlord’s favor, it is crucial to be aware of them, so you can better understand what you are paying for when comparing various buildings so there is a true “apples to apples” comparison.

 

Load Factors

When calculating rentable square feet, landlords use a load factor. Depending on the common areas are in the building, the load factor is a measurement to evaluate which is the best deal for your commercial rental space, as all buildings are “not created equal.” Load factors vary from building to building depending upon the architectural design of the building. The higher the load factor, the less useable square footage a tenant has the “use” of. Load factors are calculated by dividing the RSF by the USF. The load factor calculates how much rentable square feet you will be charged for. As we all know, life is unfair. A tenant’s obligations are based on the higher rentable square footage and all the items the landlord pays for, such as the tenant improvement allowance, on the lower useable square footage.

 

Tenant Representation

You may also see an increase in price when new building owners take over commercial properties. Somehow, it seems that the square footage is the same, but the building grows on your lease. Often, new owners will “re-measure” the office building under updated BOMA standards resulting in more rentable square footage, that you – the tenant – will be paying for when you renew your lease. Understanding load factors and the guidelines for how commercial office space is measured can help you gauge the price you are paying versus the price you should be paying.

There are experts to help you calculate commercial office space and determine which price is the best price for you. Are you confused by the numbers and already wishing for some relief? Tenant representatives are available to do the number crunching for you and analyze potential leases to help you find the best deal. It can be difficult to stand up to a landlord and negotiate calculations when you are unsure of how the industry actually works. Do some research on tenant advocacy to understand which companies can help you and add value to your lease.

Make sure you are paying your fair share based on your commercial office space. 365 days a year, Mazirow Commercial, Inc. negotiates leases to protect and save tenants rent dollars on many lease terms. Don’t go to the table alone, contact us today. We are the tenant advocate.