Rentable vs. Usable

Question:
A tenant in a multi-story office building asked: Hi Bob: My lease indicates that our office suite is 2,400 rentable square feet in size. However, when I measure the interior of my suite, we actually have closer to 2,000 square feet. Is my landlord overcharging me? Tom

Hi Tom:
The amount of space you measured in your suite is often referred to as "useable square feet". Your lease indicates that your rent is calculated using rentable square feet. Like most landlords of multi-tenant buildings, your landlord charges each tenant for its pro-rata share of the common areas (hallways, restrooms, janitorial closets, cafeterias, work out rooms, and lobbies etc.). Vertical penetrations such as stairwells, elevators shafts and HVAC duct chases are excluded from the calculation. The landlord will determine the total common area space and then add a proportional amount to the useable area of the space you rent ("add-on factor"). The new total is called "rentable area".

For example, if you occupy 1,000 useable square feet in a building that has 10,000 square feet of useable space and 1,000 square feet of common area, your rentable square feet would be 1,100 square feet. 10% of the common area space is added on to your useable square feet because you occupy 10% of the useable space in the building. In a typical building, the add-on factor would be between 15% and 25%. If you have 2,000 useable square feet and the add-on factor is 20%, then your rentable area is 2,400 square feet.

Sincerely,

Robert Gaucher
O,R&L Commercial