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Location, location, location. That is the preeminent notion in real estate. But what comes next is the square footage. Square footage is a complicated, debated and for most commercial tenants, a truly technical term. So what is the square footage issue?
One of the first things an investor asks when leasing or buying a business property is, “what’s the square footage?” The concept is similar to homes, but not well understood by those not in the real estate industry.
Next time you want to lease out an office space or a warehouse for your business, it is reasonable to learn what lingo brokers, landlords and seasoned commercial tenants use to pepper their conversations with, in order to understand the details of your commercial property.
RSF (Rentable Square Feet): It is a predetermined percentage of common areas of the building that the tenant benefits from. It includes bathrooms, elevators, lobbies and stairwells
USF (Usable Square Feet): This is the actual space that the tenant will be occupying
GSF (Gross Square Feet): For landlords, this is the total number of square feet that they can rent out
Load Factor: This is a method of calculating total monthly rent costs to a tenant that combines usable square feet and a percentage of square feet of common areas. It is a combination of the USF and RSF multiplied by the number of square feet
Not all square feet are equal. The amount chargeable per square foot varies considerably depending on the area, condition of the property, facilities available, other commercial tenants in proximity and various other factors. It is important to do your research and get the facts before signing the lease agreement.
• Investors should learn the terms used in the real estate industry
• Tenants must pay attention to the breakdown of rental costs
• Amount per square foot varies on location, condition, facilities
Source: Bushra Hameduddin, Special to Properties
The writer is a freelancer