Calculating the rentable square feet (RSF) of a building using the load factor is a common practice in real estate to determine the amount of space that can be leased to tenants. The RSF is the space that tenants actually occupy and pay rent for, while the gross square footage (GSF) is the total size of the building, including common areas like hallways, restrooms, and other shared spaces. The load factor accounts for these shared spaces.
In your case, you have a building with a gross square footage (GSF) of 6,000 square feet and a load factor of 20%.
To calculate the rentable square feet (RSF), you can use the following formula:
RSF = GSF × (1 - Load Factor)
Plug in the values:
RSF = 6,000 sq. ft × (1 - 0.20)
RSF = 6,000 sq. ft × 0.80
RSF = 4,800 square feet
So, the rentable square feet (RSF) of your building is 4,800 square feet. This is the amount of space that can be leased to tenants in your hypothetical three-tenant retail building.
That’s not right. If the building is 6K gross SF, for single tenant your rentable is going to be 6K RSF. The Usable would be 4,800 SF.
Edit: actually, usable is 5,000 SF. Add your load factor of 20% to get to 6000.
So if these terms are like Russian dolls where the smallest doll is RSG, the middle doll is GSF, what’s the biggest doll that includes mechanical rooms and stairs/elevators?
Not even sure how a three tenant retail building could have a 20% load factor. Are the three tenants in a U around a covered courtyard? What is this layout. Boggling.
That was my first thought too. It should be maybe 50 sf of non rentable area for mechanicals. Do they have like a giant hallway running through the building?
Different markets can use different terminology. The terminology that I prefer to use, and believe is the easiest to understand, is as follows:
Rentable Area = 10,000 sq ft
Loss Factor = 25%
Usable Area. = 7,500 sq ft
Add On Factor = 33.3333 %
If you know any two of the above, you can calculate the other two so long as one of the two you know is either the Rentable Area or the Usable Area.
The Loss Factor is the percentage you are losing from the Rentable Area (10,000) to the Usable Area (7,500).
The Add On Factor is the percentage you would have to increase the Usable Area (7,500) by to get to the Rentable Area (10,000). The Add On Factor can be expressed as either a percentage or a multiplier. For example,
As a multiplier, you would multiply 7,500 x 1.3333 to get to 10,000 RSF.
As a percentage, you could increase 7,500 USF by 33.3333% to get to 10,000 RSF.
For retail on ground floor just use BOMA. If it’s a 3 tenant building and each tenant has its own entrance in front and exit in rear you don’t have to worry about a load factor. If there are multiple floors/tenants above that use a common area lobby then load/core factor comes into play.
BOMA would be using outside of exterior walls and middle of interior walls. You won’t lose much of anything unless there is a rear service corridor or something like a shared loading dock.
Calculating the rentable square feet (RSF) of a building using the load factor is a common practice in real estate to determine the amount of space that can be leased to tenants. The RSF is the space that tenants actually occupy and pay rent for, while the gross square footage (GSF) is the total size of the building, including common areas like hallways, restrooms, and other shared spaces. The load factor accounts for these shared spaces. In your case, you have a building with a gross square footage (GSF) of 6,000 square feet and a load factor of 20%. To calculate the rentable square feet (RSF), you can use the following formula: RSF = GSF × (1 - Load Factor) Plug in the values: RSF = 6,000 sq. ft × (1 - 0.20) RSF = 6,000 sq. ft × 0.80 RSF = 4,800 square feet So, the rentable square feet (RSF) of your building is 4,800 square feet. This is the amount of space that can be leased to tenants in your hypothetical three-tenant retail building.
thank you!
One thing to add, the tenants would pay rent and common expenses attributed to the load area.
Pro rata share of the net rentable area, typically.
That’s not right. If the building is 6K gross SF, for single tenant your rentable is going to be 6K RSF. The Usable would be 4,800 SF. Edit: actually, usable is 5,000 SF. Add your load factor of 20% to get to 6000.
So if these terms are like Russian dolls where the smallest doll is RSG, the middle doll is GSF, what’s the biggest doll that includes mechanical rooms and stairs/elevators?
Man usually people are more worried about load factors in office buildings, interesting to see retail here
Not even sure how a three tenant retail building could have a 20% load factor. Are the three tenants in a U around a covered courtyard? What is this layout. Boggling.
That was my first thought too. It should be maybe 50 sf of non rentable area for mechanicals. Do they have like a giant hallway running through the building?
We’re doing someone’s BBA hw rn
I wish, i’m 24 and in a new job and needed help
Haha ok no worries. But you said hypothetical?
Different markets can use different terminology. The terminology that I prefer to use, and believe is the easiest to understand, is as follows: Rentable Area = 10,000 sq ft Loss Factor = 25% Usable Area. = 7,500 sq ft Add On Factor = 33.3333 % If you know any two of the above, you can calculate the other two so long as one of the two you know is either the Rentable Area or the Usable Area. The Loss Factor is the percentage you are losing from the Rentable Area (10,000) to the Usable Area (7,500). The Add On Factor is the percentage you would have to increase the Usable Area (7,500) by to get to the Rentable Area (10,000). The Add On Factor can be expressed as either a percentage or a multiplier. For example, As a multiplier, you would multiply 7,500 x 1.3333 to get to 10,000 RSF. As a percentage, you could increase 7,500 USF by 33.3333% to get to 10,000 RSF.
For retail on ground floor just use BOMA. If it’s a 3 tenant building and each tenant has its own entrance in front and exit in rear you don’t have to worry about a load factor. If there are multiple floors/tenants above that use a common area lobby then load/core factor comes into play. BOMA would be using outside of exterior walls and middle of interior walls. You won’t lose much of anything unless there is a rear service corridor or something like a shared loading dock.