Load Factor

Load factor is the percentage by which a tenant’s usable square footage is increased to arrive at rentable square footage. It represents that tenant’s proportional share of building common areas — lobbies, corridors, restrooms, mechanical rooms — which everyone uses but nobody occupies exclusively.

Calculating it

load factor = (rentable sq ft / usable sq ft) - 1

A suite with 9,200 usable square feet and 10,580 rentable square feet carries a load factor of 15%. Working in the other direction:

rentable = usable x (1 + load factor)

Typical ranges

Multi-tenant office buildings usually fall between 10% and 20%. Buildings with generous lobbies, multiple elevator banks, or unusual floor plates land higher. Single-tenant buildings approach zero, because there is little shared area to allocate.

A load factor well above 20% deserves scrutiny. It materially raises effective rent, and it may reflect an aggressive measurement standard rather than genuinely large common areas.

Why it matters when comparing space

Two suites quoted at the same rate per rentable square foot can cost very different amounts per usable square foot. A $28.50 rate on a 15% load factor works out to about $32.78 per usable square foot; the same rate on a 22% load factor is $34.77.

Because tenants occupy usable space but pay for rentable space, the effective rate per usable square foot is the honest basis for comparison. The load factor calculator computes it directly.

It is partly a negotiating term

Although load factor is derived from measured areas, which areas count as common is a matter of measurement standard. BOMA publishes several, and they do not produce identical results for the same building.

For that reason the lease should state both the measurement standard and the agreed rentable area as a fixed figure. A rentable area that shifts between the letter of intent and the executed lease is a rent increase in disguise.