There are a few things in commercial leases that can seem confusing. One of the most common issues is understanding rentable and usable square footage. Knowing the difference between these two kinds of spaces will save a business owner a lot of confusion. Determining warehouse space needs is determined by figuring out the usable and rentable space needed. Commercial real estate development is a thriving industry with great vacancies available. In this post, you will learn more about both usable and rentable commercial space.
Usable office space is the area that is inhabited by an office. It is important to know what usable office space you are getting when leasing commercial property. There are different variations to be determined when calculating usable square footage. Tenants who are on a partial floor lease will have usable office square footage consist also of restroom used on the site. If a tenant occupies an entire floor, all space within the boundaries of a floor is considered usable, even electrical closets.
Rentable space helps determine what percentage of common areas will be paid by a renter. It is common for larger buildings to rent out to multiple tenants. However, these buildings will commonly feature lobbies, bathrooms, and lunch areas that are shared by multiple companies. Rentable office space includes the usable space plus a portion of payment for shared space. Renting commercial real estate sometimes means sharing payment for common areas.
In many cases, a load factor is determined to figure out actual rental costs. Determination of the load factor is figured out by dividing rentable square feet by usable square feet. The total number will be the load factor. For example, a building with a total area of 80,000 that has 75,000 of usable space will have a load factor of 1.06. Determining the load factor is essential in determining which businesses share the cost of shared areas.
In closing, understanding the difference between rentable and usable space is important. Different types of areas are considered usable space, based on the space being rented. Rental commercial real estate on an entire floor means that floor is all usable space. Rentable space will sometimes include payment for shared spaces with other tenants. Renting commercial real estate can sometimes seem confusing. However, working a team of qualified professional ensures your business has a helpful team in its corner.