Buying an Office Space - Which Square Footage to Use?

Question

Hi, I am looking to purchase an office in an office condominium. Should I base my offer on the usable/occupiable square footage or the gross square footage (rentable square footage)?

Usable: 815 sf.

Gross/Rentable: 965 Sf.

Bill Snyder · Answer

The Building and Office Managers Association (BOMA) has official standards covered under ANSI Z65.1-1996 STANDARD METHOD FOR MEASURING FLOOR AREA IN OFFICE BUILDINGS.

Victor Grullon · Answer

Hi Wendell, thanks for your response! Just to clarify, this same logic of using the rentable square footage would apply to a purchase as well? Even though as a condo unit owner I will have to pay monthly Condo Association Fees for use of the common areas/bathrooms etc.

Wendell Fong · Answer

I was going to explain this in my own words, but i found a decent explanation and just cut and pasted. Your answer is at the bottom, it is the gross or rentable sqf.

https://42floors.com/edu/beyon...

A commercial office building is not made up of private offices and cubicles alone. Corridors, meeting spaces, lobbies, stairways, restrooms and so on are used by all building tenants, and landlords charge for the use of this space as well. Rentable office space means the usable square feet of the office space plus a pro-rata share of building common areas. Pro-rata means that tenants pay for these common areas in proportion to the amount of space they lease in the building.

Load Factor

To calculate rentable square feet, landlords use what is called a load factor (also called a common area factor, or an add-on factor). This number is based on the percentage of common areas found in the building. If a building has a total square footage of 100,000, with 85,000 usable square feet (which is to say 15,000 square feet of common areas), the load factor would equal to the rentable square feet divided by the usable square feet, or 1.15.

Building Rentable Square Feet ÷ Building Usable Square Feet = Load Factor

100,000 ÷ 85,000 = 1.15

This load factor is then multiplied by individual tenants' usable square feet to come up with the total rentable square feet. If a company desired to lease 5,000 usable square feet, for example, this number would be multiplied by the load factor of 1.15 to reach the number of rentable square feet:

Tenant Usable Square Feet x Load Factor = Tenant Rentable Square Feet

5,000 usable square feet x 1.15 = 5,750 rentable square feet.

The rentable square foot amount would then be multiplied by a rental rate to come up with the company's total annual or monthly rent.