Know How Much Room You are Paying for in Commercial Office Space
When it comes to acquiring the best deal on commercial office space for your growing company, it’s of the utmost importance to understand what, exactly, you are paying for. Most office space is listed with a rentable square footage rate, which is likely quite a bit more space than you will actually be able to occupy as the tenant. Getting clear on the difference between your rentable square footage and your usable square footage is a great way to help you lock down the best deal for your dollar.
Usable Square Footage
The term usable square footage (or USF) refers to the actual space from wall to wall that is available within a commercial office space. If you are only renting out a portion of a floor within a building, this number will likely include the whole of your office space, as well as any storage rooms or private restrooms included within the parameters of your leased area. If you are occupying an entire floor within a particular building, this figure will include every space within the boundaries of the exterior walls on that floor, excluding only stairwells and elevator shafts. This means literally everything else, from storage closets, to mechanical and electrical rooms, private bathrooms, hallways, reception areas, kitchen areas, et cetera.
Rentable Square Footage
The rentable square footage (or RSF) within your commercial office space is going to differentiate from your usable square footage, depending on a few factors. The RSF on a particular property takes into consideration shared common areas within the building that benefit each tenant who leases there. This might mean spaces like shared corridors, communal meeting rooms, lobbies or building reception areas, stairways, common restrooms, shared kitchens, elevators, and so forth. A pro-rated portion of these common areas is then added onto the USF. It is calculated using a method called the load factor.
The RSF of an entire building divided by its USF will be what determines the load factor of the property. The load factor, which is also commonly referred to as a common area factor or an add-on factor, will be used to calculate the rentable square feet within a particular commercial office. For example, if the RSF of the entire building is 100,000 square feet and the USF is 85,000 square feet, you will end up with a load factor of 1.15. (100,000/85,000=1.15). Now, take the load factor and multiply it by the USF of the potential lease space and this will give you your total RSF for that particular office. To give an example, if you are looking to lease a commercial office space with 5,000 usable square feet in a building with a load factor of 1.15, you will be paying for 5,750 rentable square feet of space.
Why it Matters
You may be reading all of these calculations and still be confused as to why it all matters. It actually matters quite a bit, and we can explain why. If you were looking at the same 5,000 square feet of usable space within another potential commercial office space lease, and it happened to be in a building with a load factor of 1.35, you are now actually paying for the cost of 6,750 usable square feet of the building once everything is pro-rated, whether or not you intend to use said space.
The Best Option
When it comes to any given commercial office space lease, it is really up to the tenant to determine what the best option is for the needs of their business. If, for example, you know that a large, fancy lobby may draw your target clientele to choose you over another company, than it may be worth it to pay for the extra space. On the other hand, if the inclusion of a large, communal kitchen is what’s putting your budget over the top, but you have viewed other options with kitchenettes included in the actual office space for a much more reasonable price, this may sway you in a different direction. The bottom line is truly whether the extra amenities will add to your business, or whether the extra cash will be of more benefit.
Looking for Commercial Office Space in Tampa?
If you’re looking for commercial office space in or around the Tampa area, look no further. John Milsaps has dedicated the past ten years to learning the ins and outs of the commercial real estate market throughout the Tampa bay area. He specializes in working with both landlords and sellers, connecting business owners to the right strategic partners or buyers in an effort to ensure easy, successful transactions. Take a look through his database of available properties today and contact him to get your search started!