Nobody has to tell you about the value of curbing costs in today’s tough economic times. In fact, cutting back on expenses can often mean the difference between showing a profit – or sustaining a loss – when it comes to your bottom line.
That’s why it’s important to know the difference between your Usable Square Footage (USF) versus your Rentable Square Footage (RSF).
Useable Square Footage, or USF, is the actual amount of square footage in your office suite if you were to take a tape measure and measure your offices from wall-to-wall. On the other hand, Rentable Square Footage, or RSF, is your Useable Square Footage, USF, plus what is called a `common area factor’.
In most office buildings, the `common area factor’ is 15 percent. This `common area factor’, also known as the `load factor’ is the landlord or management company’s way of taking into account the common area space in your building, such as stairwells, elevator shafts, hallways, restrooms, lobbies, mezzanines, and workout facilities, etc. – and then equitably charging tenants like yourself for this extra commonly used space.
Here’s how to calculate your USF versus your RSF to see how much you should really be paying.
The way to calculate your RSF is to take your USF and multiply it by one plus the `common area factor’ expressed as a decimal.
For example, for 1,000 square feet of office space with a standard `common area factor’ of 15 percent, the calculation would be: 1,000 Usable Square Feet (USF) times 1.15 = 1,150 Rentable Square Feet (RSF).
The bottom line is: as a tenant, you need to make sure you understand what your USF is versus what your RSF is. You also need to know what your landlord is calculating as a `common area factor’ and then be comfortable with it.
If your `common area factor’ is calculated at more than 15 percent, particularly if it’s into the 20 percent range, your building can be considered inefficient based on industry standards.
If this is the case, you should definitely ask your landlord to charge you based on a more typical 15 percent load factor as this can reduce your lease costs significantly. Don’t overlook this critical calculation to keep your lease as cost-effective as possible.
Before you negotiate your next lease, be sure to contact Matt Edgar at 720.435.2191 for a FREE LEASE ANALYSIS, with ways to SAVE THOUSANDS on your office lease.
Filed under: Office Space, Reduce Office Rent Tagged: Colorado, commercial leases, Commercial Real Estate, Denver, DTC, Free Lease Analysis, Landlord, lease, Lease Analysis, Lease Negotiation, Lease Renewal, New Office, Office Space, real-estate, Relocate Office, Relocation Checklist, Tenant Representation
