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The Difference Between Usable Square Feet and Rentable Square Feet

With Office and Retail Leases, You Pay for More than Just Your Space

Credit: iStock
Credit: iStock

You might believe that when you lease an office suite, the amount of square feet you pay for is the same number of square feet you're actually occupying. However, with commercial office buildings you receive (and pay for) more than just your suite.

The actual office space you occupy is called the Usable Square Feet, or USF. All tenants in the building share use of the common areas like hallways, stairwells, lobbies, restrooms, etc. Each tenant pays their pro-rata share of leasing the common areas in addition to their USF. This is how the Rentable Square Feet (RSF) is determined.

Let's assume a building is 100,000 square feet in size and the common area that can be used by all building tenants is 15,000 square feet of the total square footage. That means the building has a common area factor of 15%.

If you occupy 20,000 USF, you would pay rent on that plus 15% (common area factor) to equal 23,000 RSF.

An office building floorplan with common areas occupying 15% (hallways, restrooms, lobby, stairwell, and so forth), leaving 85% leasable space, may look similar to this:

In the same example, if your rent is $20.00 per RSF per year, because you are leasing 23,000 RSF rather than 20,000 USF, your annual rent would be $20 x 23,000 RSF = $460,000/year (or $38,333/month).

Please note that these example calculations are considered best practices, but may not be used as a guide by all landlords in all cities.

About the Author: Beth Young
Beth Young serves as Senior Vice President of Colliers International in Houston, Texas. She develops and executes acquisition, disposition and leasing strategies for investors and users of healthcare and office real estate. She serves as Trustee of the Harris County Hospital District Foundation, Director of the Greater Houston Women's Chamber of Commerce and Chairman of the Women's Health Network of the Texas Medical Center.

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