What is the Difference Between Rentable and Useable Square Feet in a Kansas City Office Space?

What is the Difference Between Rentable and Useable Square Feet in a Kansas City Office Space?

Do you ever wonder why it seems that the price listed in a lease seems to be for more space than what you actually get in the office? One of the biggest sources of confusion for potential tenants is the difference between actual office space square footage and square footage listed for rent purposes. Rentable square footage typically incorporates not only the office space itself, but also common areas of the building. Because of this, tenants effectively pay rent for more space than they occupy and they need to be aware of this as they search for commercial space. Here are some clarifications of common misconceptions regarding usable versus rentable square footage, as outlined in the article “Understanding the Common Area Factor: Rentable vs Useable Square Feet:”

Usable Square Footage

Usable square footage is typically defined as the space a tenant actually inhabits. In smaller rental properties, this might simply be the area inside your office suite, which does not take into account entry or exit areas or columns – so the space is measured as if the columns don’t exist. However, janitor closets, restrooms, elevators, lobbies and corridors are factored into the square footage and the tenant is responsible for a certain percentage of the cost of these spaces. Larger spaces that consist of a full floor or multiple floors include everything in this area such as restrooms, mechanical and electrical rooms, etc. These full floor tenants also are responsible for a portion of common area expenses – even ones that aren’t on their floor – such as the main lobby of the building.

Rentable Square Footage 

Rentable square footage is every inch of floor space in a property, including restrooms, electrical rooms, and janitor closets. This excludes things like holes in the floor for stairwells and elevators, but every other space is included in the rent. The cost of the rent then consists of the listed rentable square footage multiplied by the lease rate per square foot. There are calculations to help determine rentable square footage for different size tenants. For instance, a less than full floor tenant should multiply usable square footage by the floor common factor, then take this number and multiply it by the common factor of the building. A larger tenant would also multiply usable square footage by the common factor of the building to account for shared spaces and amenities in the building.

The Common Area Factor

Another important piece in this puzzle is the common area factor, which is a number that accounts for the shared spaces on either a single floor or in the whole building. These common areas might either be used by all of the building’s tenants or be pro rata shares that are specific to one tenant suite.

  • Floor Common Area Factor – this number represents the tenant’s common areas only on their floor. It is different for different properties, but typically it is 8% of the space, meaning the factor is 1.08.
  • Building Common Area Factor – this consists of all the tenant common areas in the building and determines the rentable square footage number for which a tenant will actually pay. This also ranges from about 6-8%.

Quoted common area factors in a listing are typically a combination of the floor common area factor and the common area factor for the building. Often the total common area factor is is around 12-20% based on the building. In different markets, sometimes these calculations are slightly different, so it is important to clarify with an attorney or an agent exactly what is included in the cost of rent and the listed square footage.

Making Comparisons

When considering your options, keep in mind the different common area factors or even the shape of the space and how it can impact your bottom-line cost. Use a usable square footage metric when comparing buildings just to make sure that you are consistent in the numbers you’re generating for evaluation. Bear in mind that two spaces that have the same rental rate might actually have different values based on the common area factors or even the efficiency of the space’s design.

Address all of these issues before you sign a lease, as there is very little that can be done after a lease is agreed upon. Make sure that your own legal representative verifies that the common area factor number that your landlord provides actually corresponds with the reality of the space. Again, this is one of those tricky parts of leasing and makes it worthwhile to work with an expert to ensure that you’re getting the best deal based on accurate information.

If your business is looking into commercial space for rent in Overland Park, give us a call at 913-685-4100 to find out more about our Overland Park office space for lease and potentially set up a tour.

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