How it works
Usable area is the floor space inside a tenant's premises: the area for desks, rooms, kitchens and internal corridors. Rentable area adds the tenant's share of space that serves everyone, such as main lobbies, shared corridors and restrooms on a multi-tenant floor, and building service areas. Elevator shafts and stairwells are generally excluded from both.
In the United States and Canada, office space is usually measured under BOMA standards, and leases quote rent per rentable square foot. The load factor, also called the R/U ratio, converts one figure into the other. A higher load factor means more of the rent pays for shared space. Other markets use their own measures, such as net internal area in the UK.
The difference matters for planning. Desks, rooms and neighborhoods can only go in usable space, so capacity, space per person and test fits use usable area, while cost comparisons and lease budgets use rentable area.
Formula
Load factor = Rentable square feet ÷ Usable square feet
- Rentable square feet
- The area rent is charged on: the tenant's usable area plus its share of common areas.
- Usable square feet
- The area inside the tenant's premises that it can occupy and furnish.
- Add-on factor
- (Load factor − 1) × 100: the share added for common areas, as a percentage of usable area.
Worked example · illustrative figures
- A tenant's premises measure 10,000 usable square feet.
- Its share of the floor and building common areas is 1,500 square feet, so rentable area is 11,500 square feet.
- 11,500 ÷ 10,000 = 1.15.
- At $50 per rentable square foot, annual rent is 11,500 × $50 = $575,000, which is $57.50 per usable square foot.
Load factor 1.15, an add-on factor of 15%: the tenant pays rent on 15% more space than it can use.
How to measure it
- Ask for the landlord's measurement report, including the standard and version used; the answer can change the rentable figure.
- Compare buildings on rent per usable square foot, not only the quoted rent per rentable square foot.
- Plan capacity and space per person from usable area.
- Check load factors against similar buildings in the same market before you sign.
Examples
- Two buildings quote the same rent per rentable square foot, but one has a higher load factor, so the tenant gets less usable space for the same rent.
- A company comparing a move calculates space per person on usable area, so the rentable figure does not overstate how many desks will fit.
Common mistakes
- Planning desk counts from rentable area, which counts space you cannot use.
- Comparing buildings on quoted rent alone without adjusting for load factor.
- Mixing measurement standards or versions across a portfolio.
- Assuming the load factor is fixed; it can change when a building is remeasured or a floor is split between tenants.
Frequently asked questions
What is the difference between rentable and usable square feet?
Usable square feet is the space inside your premises that you can occupy and furnish. Rentable square feet adds your share of the building's common areas, such as lobbies and shared corridors. Rent is usually charged on rentable area, so you pay for more space than you can use.
What is a load factor in commercial real estate?
The load factor is rentable area divided by usable area. It shows how much common area is added to your premises for rent purposes. A higher load factor means a larger share of your rent pays for shared space rather than space your people use.
How do you calculate rentable square feet from usable square feet?
Multiply the usable area by the building's load factor. For example, if the landlord's load factor is one point one five, each usable square foot becomes one point one five rentable square feet. Ask the landlord for the measurement report to confirm the factor and the standard used.
Should space planning use rentable or usable area?
Use usable area for anything about fitting people and rooms, such as capacity, space per person and test fits, because only usable space can be furnished. Use rentable area for lease cost and budgets, because that is what the rent is based on.
Related terms
- Space per person Office floor area divided by the number of people it serves, in square feet or square meters per person.
- Total occupancy cost Everything an organization spends to occupy a workplace in a year: rent, operating costs, utilities, services and fit-out.
- Floor plate The area and shape of one floor of a building, which sets how many people, rooms and teams fit on it.
- Lease event A lease date that forces or allows a decision, such as an expiry, a break option, a renewal option or a rent review.
- Test fit A quick draft layout that checks whether a space program fits a specific building before a lease is signed.
- BOMA standards The Building Owners and Managers Association methods for measuring office floor area, used in leases, benchmarks and space reporting.
Sources
- BOMA Standards, BOMA International
Kadence editorial team · Last reviewed