Rentable vs. Usable Square Feet

Usable square feet (USF) is the area a tenant actually occupies — everything inside the demised premises. Rentable square feet (RSF) adds that tenant’s proportional share of building common areas. Rent is quoted and billed on the rentable figure, which is always the larger of the two.

The difference in practice

A tenant leasing a 9,200 usable square foot suite in a building with a 15% load factor is billed on 10,580 rentable square feet. At $28.50 per rentable square foot, annual rent is $301,530 — for space that measures 9,200 feet.

This is not a trick. Every tenant benefits from the lobby, the corridors, and the restrooms, and those areas cost money to build, heat, clean, and insure. Allocating them proportionally is the standard convention in commercial leasing.

Which measure to use when

• Rent and recoveries are calculated on rentable square feet.
• Pro-rata share for expense recovery uses rentable square feet, both for the tenant and the building denominator.
• Space planning — how many desks fit, where the conference room goes — uses usable square feet.
• Comparing deals is most honest on effective rent per usable square foot, since that is the space you actually get.

Watch the denominator

For recovery purposes, the tenant’s rentable area is divided by the building’s total rentable area. Both figures must use the same measurement standard, and the building figure should be stated in the lease rather than left to be recomputed later.

A building denominator that quietly shrinks — because a portion was reclassified, or a new standard was adopted — raises every tenant’s share without anyone renegotiating anything. This is one of the more common findings in a tenant CAM audit.

Convert between the two measures with the load factor calculator.