Gross building area, usable area, rentable area, gross leasable area? What does it all mean? In the San Antonio market, industrial, office, and retail properties all trade based on the square foot unit of comparison. While the square foot unit of comparison is constant, there are different building area measurements utilized for different property types. Understanding the building area measurements and the property types they are associated with is often a source of confusion. This blog article will help to clarify this confusion by outlining the different types of building area measurements and when they are most commonly utilized.

Gross building area is the total floor area of a building, excluding unenclosed areas, measured from the exterior of the walls of the above-grade area. This includes mezzanines and basements if and when typically included in the region. Gross building areas are typically utilized by appraisers and real estate professionals for single-tenant or owner occupied properties of all types. This is the most common type of measurement for general commercial buildings.

Gross leasable area is the total floor area designed for the occupancy and exclusive use of tenants, including basements and mezzanines; measured from the center of joint partitioning to the outside wall surfaces. Gross leasable area is typically used by real estate professionals for multi-tenant retail properties.

Gross living area is the total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space. In the San Antonio area, finished basements and attic areas are not generally included in total gross living area. In commercial real estate appraisal, gross living area is not typically utilized with the exception of calculating the average unit size for apartment complexes.

Usable area is the actual occupiable area of a floor or an office space; computed by measuring from the finished surface of the office side of corridor and other permanent walls, to the center of partitions that separate the office from adjoining usable areas, and to the inside finished surface of the dominant portion of the permanent outer building walls. It is also defined as, the area that is actually used by the tenants measured from the inside of the exterior walls to the inside of walls separating the space from hallways and common areas. Usable area does not include vertical penetration including stairways, elevators, common area hallways, common area restrooms, etc. Usable area is typically utilized by real estate professionals for multi-tenant office properties.

Landlords typically expect to receive rent on space in the entire office building including the common areas. In order to convert usable area to rentable area, a load factor is utilized. However, this term has several different names including common area factor, add-on factor, and core factor to name a few of the more common uses. Through this load factor, the tenant’s usable space is converted to a rentable area. Load factors are typically in the range of 10% to 20%, but buildings with significant common areas including extravagant atriums, large common area conference rooms, and break rooms, can have even higher load factors.

Rentable area is the tenant’s pro rata portion of the entire office floor, excluding elements of the building that penetrate through the floor to the areas below. The rentable area of a floor is computed by measuring to the inside finished surface of the dominant portion of the permanent building walls, excluding any major vertical penetrations of the floor. Alternatively, the amount of space on which the rent is based; calculated according to local practice. Rentable area is typically utilized by real estate professionals for multi-tenant office properties.

Understanding how these building areas are calculated, when they are utilized, and which property types utilize them is imperative to properly analyzing commercial real estate. Although these terms can often be misunderstood, landlords and tenants can benefit in lease negotiations by thoroughly understanding these differences.

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