540 Officenter Place, Ste. 260
Columbus, OH 43230
Extensive Landlord and Tenant
Completed some of the largest
transactions in Columbus, Ohio
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Bradford L. Kitchen, SIOR, President
of Alterra Real Estate Advisors, will
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floor common factor, then multiply that result by the building
Similarly, a full- or multi-floor tenant would multiply its full-floor usable by the building common factor because of the
extra shared amenities and lobby space.
The formulas to determine the usf and the rsf are: rsf = usf x ( 1
+ Add-on percentage)
Add-On percentage = (rentable sf / usable sf - 1)
For example: Assume you need 10,000 usf and there is a
15% add-on factor.
rsf = 10,000 x ( 1 + . 15) = 11,500 rsf
For example: Assume you a leasing 16,000 rsf and have
Add-On percentage = ( 16,000 / 14,000) - 1 = 14. 29 percent
In some real estate markets a load or common area factor
(CAF) is used instead of using an Add-On or Loss factor.
Sometimes various landlords have differing definitions of these
terms. It is a good practice to always clarify the calculation
with the landlord or his agent to ensure there are
It is very important for a tenant address this
issue before a lease is signed, as there is usually
little or no recourse after lease execution.
Most leases do not detail a method of direct
calculations of either usable or rentable
square footage, and if a rentable figure is
provided, it is almost always modified with
the word “approximate.” However, most
reasonable landlords will accept a revision to
lease language that the measurement of the
premises will be verified by either the tenant’s
or landlord’s architect subject to an acceptable
measurement standard such as the BOMA
Standard or the commonly accepted standard
for the market. Your tenant representative
should verify that the common area factor
represented by the landlord approaches reality.
COMPARING VARIOUS BUILDINGS
When you are out evaluating space options it
is important to note that most buildings have
different common area factors and floor plate
dimensions or shape can impact the space plan
and the required amount of useable square
footage. When comparing buildings particularly
from a financial aspect you should be using a
cost per useable square foot (USF) metric, to
be sure you are evaluating your options on” apples to apples”
Ultimately you are looking for the right space that not only fits
your budget but also other real estate and workplace criteria.
However, two buildings with the exact same face rental
rate can have significantly different economic as a result of
common area factors and space design efficiencies.
Working with a tenant representation specialist who understand
all the intricacies of leasing office space and possesses the
technical skills to evaluate various options will insure you are
making an informed decision.
*Republished with permission from The Tenant Advisor,
COY DAVIDSON is Senior Vice
President of Colliers International,
Houston. Davidson has over twenty
years of experice in commercial real
estate specializing in corporate real
estate services tenant representation
office leasing and investment sales. To
read more from davidson visit www.
ABOUT THE AUTHOR