0 items, $0
Question: I'm renting 4,000 square feet of space (my measurement), but I'm being charged for almost 5,000 square feet. My real estate broker says this is standard. Is she correct?
Answer: She is. You're measuring on the basis of usable area while your landlord is charging you on the basis of leasable (aka rentable) area. It's a common discrepancy, and one you should be aware of before you negotiate your next facilities lease.
Leasable area is the square footage that rent is actually being paid for and usually includes public or "common" areas such as hallways, entry areas, stairways and public bathrooms.
Usable area is the space actually occupied by the tenant as measured in square feet. This does not include the areas of the building that lie outside of the space you lease but are used by all tenants and guests of the building.
Your concern is the loss factor, the difference between rentable and usable areas. It's expressed as a percentage of the former.
For example, if a landlord charges you for 5,000 leasable square feet but the usable area is 4,000 square feet, the loss factor is 20%. Compare apples to apples by always calculating the annual rental rate per square foot based on the usable area.
This article originally appeared in The Business Owner Journal, the periodical of choice for owners of small and midsize private businesses. All rights reserved, D.L. Perkins LLC. © 2010.
This publication is intended to provide general information on the subject matters covered. It is sold and distributed with the understanding that neither the publisher nor any distributor or advertiser is engaged in providing legal, tax, insurance, investment or other professional advice. The advice of a qualified professional should be sought before any reader applies a concept presented herein to his or her particular situation or business.
D.L. Perkins, LLC is solely responsible for this content.
Facebook
RSS
Twitter
Blog
You Tube
