Usable vs. Rentable Square Feet

usable vs rentableDefinitions:

The difference between ‘usable’ and ‘rentable’ square feet is the ‘load factor’.  The load factor is a percentage of common building space that every office tenant pays for in addition to the space that is within the walls of each suite.  The load factor includes: the main building lobby, common corridors, elevator lobbies, building restrooms, mechanical rooms, elevator shafts, etc.  The generally accepted average load factor in Seattle is 15%.  Usable square feet is the space within the walls of each suite.  Rentable square feet is the usable square feet + the load factor.

What Matters:

The only calculation for square footage that any office tenant should care about is the rentable square footage because that is what you pay for.  Don’t jump to the conclusion that the lower the load factor the more efficient the building because this isn’t always true.  When determining the efficiency of a space, the only calculation that really matters is # of employee spaces per rentable square foot that can fit into a space with the same buildout (ie: # of offices, workstations, conference rooms, etc.).  For example, it is possible to fit more people into a 20,000sf space in a building with a 20% load factor than in a 20,000sf space in a building with a 10% load factor.  This is because the shape of the building floor-plate arguably matters just as much as the load factor.  The most efficient shape of a building floor-plate is a square.  In the example above, a long rectangular floor-plate in a building with a 10% load factor could be less efficient than a square shaped floor-plate in a building with a 20% load factor.

Conclusion:

Ultimately, in order to understand which space is most efficient a space plan or test fit should be completed to determine the # of employee spaces per rentable square foot.  This is an exercise that most buildings will pay for with no obligation from a prospective tenant.  Also, keep in mind that some buildings will cap their load factor in order to be more competitive.

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