Usable Space | Rentable Area | Keller Williams Commercial Real Estate, Florida

When considering the cost of leasing space in a commercial building, there are three key factors to understanding how to get the best usable space, price, and amenities:

  1. Usable square footage
  2. Rentable square footage
  3. Load factor (also called common area factor or add-on factor)

Usable Square Footage vs. Rentable Square Footage

Simply put, usable square footage is the wall-to-wall floor space a tenant will occupy in order to do business. This does not include features like lobbies, shared restrooms, hallways, and storage closets. If a tenant occupies a full floor, the usable space will include any of these areas that are used exclusively by that floor.

Rentable square footage is the total usable square footage a business will occupy, plus a proportionate (sometimes referred to as pro-rata) amount of the shared communal spaces, like reception areas or kitchenettes that serve entire floors. Since these amenities benefit you and your business, you pay for a portion of them in your rent.

Load Factor

The load factor can tell you what proportion of a building is shared space, and therefore how much additional square footage will be factored into your rent each month. For example: a client is looking at two buildings, both with the same rental rate and 5,000 usable square footage. One building has a 15% (or 1.15) load factor, and one has a 20% (or 1.20) load factor.

In the first building, the rental rate will apply to 5,750 (5,000 x 1.15) square feet.  In the second building, the rental rate will apply to 6,000 (5,000 x 1.20) square feet. The second building would cost more per month; however, the client may decide that the greater shared area, like maybe a fancier lobby or larger kitchenette, would be worth the expense.

A client will never be able to pay for usable space alone; communal spaces will always factor into the cost of the rentable area of a building. Understanding load factor can help a tenant make educated decisions about the space being rented and how to prioritize work space and general access to amenities against cost and rental rates.

Questions about usable space, rentable area, and maximizing your commercial real estate investment? Give the experts at Keller Williams Commercial Real Estate a call now at 561-258-9619.

Guide to Choosing the Right Business Location | Keller Williams Commercial Real Estate

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