One of the first steps in planning for office space is to determine how much space you need. These “rules of thumb” can help estimate the amount of usable square feet required for your business based upon uses.
So far, the math is simple. Determine the number and size of offices, conference rooms, etc... plus an estimate of space needed for circulation (hallways/corridors) inside your suite and you can roughly estimate your usable space requirement.
Now that you’ve developed an estimate of the amount of space you’ll need, it should be straight forward to identify the space alternatives that meet your size and budget requirements. But it’s not. Because, while tenants understand and think in terms of their usable space needs and budget limitations, commercial office space is typically marketed as rentable square feet.
Office tenants understand that you can’t determine rent without the rental rate and square footage. What they often don't understand is that load factor is the variable in the rent equation used to calculate the rentable square footage.
The load factor is applied to the tenant’s usable square footage to convert it to rentable square footage. Understanding how square footage is calculated is essential to determining the best size fit and value for your office space.
For example, two alternatives with the same rentable square footage may appear equal but they aren’t.
From a tenant’s perspective, with the differences in load factor (20% vs 10%) you gain 757 usable square feet (9,090 USF - 8,333 USF) in Option 2 versus Option 1.
For this reason, it’s important to understand how square footage calculated on your commercial office lease.