Commercial Leasing: Usable Areas vs. Rentable Areas

March 10, 2016

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When it comes to evaluating your new office space, one of the first things you determine is the total rentable square feet. If you’re looking at a 2,000-square-foot office space, you should expect to pay rent for 2,000 square feet of space, right? Not so fast.

The 2,000 square feet may indeed be the size of the office you’re looking at, but commercial leases generally involve paying rent on a portion of the shared spaces, as well. That means the lobby, the restrooms down the hall and any other community building space may be included in your rent.

Determining the total rentable square feet typically involves:

  • Usable square feet (USF)
  • Rentable square feet (RSF)
  • Load factor

Usable Square Feet

Usable square footage refers to the actual office space your company will be occupying. If you’re looking at an office that measures 2,000 square feet from wall to wall, your usable square footage is 2,000.

Rentable Square Feet

shutterstock_299515868Rentable square footage is the sum of your usable square footage plus a portion of the shared, common areas throughout the building. Examples include shared hallways, stairwells, restrooms, storage rooms and lobby areas. Commercial leases charge tenants for using the shared areas, which means your overall total rent will be based on RSF, rather than USF.

Load Factor

Also called the common area factor or add-on factor, the load factor is a percentage that denotes the increase in square footage for the shared spaces. You can determine it by dividing the building’s overall rentable square footage by its usable square footage.

  • Load factor = RSF / USF

If a building has a total of 100,000 square feet, for example, and 15,000 square feet is shared space, the usable square footage would be 85,000.

Calculate load factor by dividing the total 100,000 square feet by the usable square feet of 85,000, or 100,000 / 85,000. You get 1.176, which would be a load factor of 17.6 percent.

Your overall rentable square footage (RSF) is thus determined calculating your usable square footage (USF) and your load factor. If you’re USF is 2,000 square feet, and the building’s load factor is 17.6 percent, you could expect to pay for a total of 2,352 square feet of space.

Comparing load factors as well as the amenities that come with the shared spaces can help you get the best overall value for the price when you’re in the market for new office space.

 

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