Rentable, Usable, and Gross Area Explained

Commercial Real Estate

MAR 19, 2024

When it comes to leasing or buying commercial spaces, understanding the different area measurements is crucial. Terms like rentable area, usable area, and gross area are commonly used but often misunderstood. In this blog post, we'll break down these concepts to help you make informed decisions in your real estate endeavors.

Usable Area

The usable area refers to the space within a commercial property that is exclusively dedicated to the tenant's use. It includes the actual workspaces, offices, conference rooms, and any other areas that the tenant can occupy and utilize for their operations. It's essentially the space where your business operates day-to-day.

Rentable Area

Rentable area, also known as "leasable" or "rentable square footage," is the total area that a tenant pays rent for. It includes both the usable area and a portion of the common areas, such as hallways, lobbies, elevators, and restrooms. This allocation is known as the "load factor" or "common area factor."

The rentable area is what is used to calculate the tenant's rent, and it accounts for a proportionate share of the common spaces that benefit all tenants in the building.

Gross Area

The gross area is the total floor area of a building, including all interior and exterior spaces. It encompasses both usable and non-usable areas, such as walls, hallways, elevators, stairwells, and mechanical rooms. The gross area provides a complete picture of the entire space, including areas that are not utilized for tenant activities.

Why These Measurements Matter

Rent Calculations

Rentable area is the basis for calculating a tenant's rent. Knowing how it's determined ensures you're being billed accurately.

Space Planning

Usable area is essential for planning the layout of your business operations, while rentable area helps you understand the total financial commitment.

Comparing Properties

When evaluating different properties, knowing the usable and rentable areas allows for an apples-to-apples comparison of the space available for your business.

Lease Negotiations

Being informed about these measurements gives you leverage in lease negotiations and allows you to make more strategic decisions.

Efficiency Considerations

Understanding usable area helps you assess how efficiently you can use the space for your specific business needs.

In conclusion, distinguishing between usable, rentable, and gross area is pivotal in making informed decisions when leasing or purchasing commercial spaces. Being aware of these measurements empowers you to negotiate leases effectively and choose spaces that best suit your business requirements.

Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.


Book an appointment

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.