Terms like Useable Sqare Footage and Rentable Square Footage are very important in the leasing of commercial real estate space. Depending on the building, the two numbers can be very different. So, what does it all mean?
Useable Square Feet (USF) is the amount of square feet measured within the confines (Premises) of the tenant’s space. Determining the appropriate USF is extremely important to the tenant since that is the area where your business will operate.
Rentable Square Feet(RSF), on the other hand combines the USF plus the common area factor of the building. RSF is also extremely important since this number will be used in calculating your rent.
In essence, the common area factor (load factor, loss factor) of a building is calculated by determining the percentage of space of all the common areas of the building such as the lobby, common restrooms, hallways and so forth. It can be a vague science of how that number is exactly calculated, however agencies such as BOMA (Building Owners and Managers Association International) sets forth standard methods of measuring.
In calculating your Useable Square Feet, you would take the Rentable Square Feet and and subtract the common area factor. For example, if an office suite is advertised as 3,500 RSF with a loss factor of 12%, you would multiply 3,500 x .12 which equals 420 SF. Then subtract 3,500 - 420 which gives you approximately 3,080 USF.
Both RSF and USF figures should be documented in your lease agreement. Be sure you fully understand the figures and terms before signing your lease as they will impact your operations and your bottom line. As always, consult with a real estate attorney for legal terms!
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BOMA(Building Owners and Mangers Association International)
Don't hesitate to let me know your additional thoughts.
Be well,
Rhonda