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Q:

In recent negotiations of leases for new office space, the terms “rentable and usable” square feet have come up. What is the difference between rentable square feet and usable square feet?

A:

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Facility Design
Rentable square feet include the usable square feet in the office space plus a proportion of the common areas. Common areas include public corridors, mechanical, telephone and electrical rooms, elevators, public toilets and building lobbies.

Per The Building Owners and Managers Association International (BOMA), usable square feet are computed by measuring to the finished surface of the office side of the corridor or to other permanent walls, to the center of partitions that separate adjacent tenant spaces and to the inside finished surface of the dominant portion of the permanent outer building walls. No deductions are made for columns or other structural support systems.

Similarly, BOMA stipulates that rentable square feet are calculated by measuring to the inside finished surfaces of the dominant portions of the permanent outer building walls.

The difference between the total rentable area and the total usable area is the common area. The common area square footage divided by the rentable square footage equals the common area factor, which is applied to the usable square feet to arrive at the rentable square feet on which the tenant will pay rent.

In typical multi-tenant, multi-story buildings, the common area factor can range from fourteen to sixteen percent (14%-16%). In smaller buildings with fewer amenities and smaller lobbies, the factor ranges from ten to twelve percent (10%-12%). It is also possible that a common area factor may not apply or may not be applied by the landlord.

 

Terrence A. Knight (bio...)
Senior Associate

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