I hope this will be helpful to all those who read, sign or write tenant leases!
Our topic this month is: What is Square Footage? There are several terms used in the industry ‐ carpetable, usable and rentable ‐ and different types of industry measurement guidelines provided by BOMA (Building Owners and Managers Association) and REBNY (Real Estate Board of New York.)
BOMA measurements are typically used outside of New York City. In New York City, it is typical to use REBNY measurement standards to determine "Usable" square footage of a given tenant's space. On this square footage, a landlord determines the rentable area that a tenant leases. Most tenants think that the measurement from the inside of the window walls to the inside of their common corridor and shared walls is their square footage.
But actually that's their carpetable. How much “carpet” is needed to install within that space.
Landlords base their rentable square footage on usable square footage per REBNY standards. This measurement is based on the area defined as the centerline of common partitions and centerline of common corridor partitions (if the tenant rents on a multi‐tenant floor) and to the center of the glass on the window lines. The area measurement also includes the full thickness of the exterior walls. On full tenant floors, the measurement includes toilets, elevator lobbies on the floor (and freight lobbies), electrical, mechanical rooms and janitor closets that are dedicated to the floor.
On shared or multi‐tenant floors these areas are pro-rated to the tenant base on each tenant’s space and that square footage area defines "Usable" square footage. A landlord takes an allowance for other amenities in the building, i.e. loading docks, building utilities in the basements or cellars, main building lobbies and gives those areas as a factor (sometimes referred to as the "Loss Factor") and applies that to determine rentable square footage of a tenants space. There is no scientific measurement standard to the rentable calculation. This drives many tenants to frustration and the only way to challenge a square footage is to challenge the usable measurements.
Most of the time, it's market driven. If it's a tenant market, the loss factor can be as low as 20%. In good market times, this number can be 30% or higher. Knowing the square footage terminology and usage is an important concept in leasing as it dictates the terms of the deal that can benefit different parties.
Kahn Architecture works on behalf of landlords and tenants to address this challenge when scoping the feasibility of a prospective space. During the real estate search period, Kahn Architecture is brought in to assist with the verification of square footage and the further review of leases which ultimately leads to developing a space plan to see how a tenant’s programming goals fit in that area of space.
Michael Kahn is the co‐owner of Kahn Architecture, a women's owned corporate interior architecture firm located in Midtown Manhattan specializing in office build‐outs. Michael is NCARB‐certified, a member of the AIA and licensed in New York, Connecticut, New Jersey and Washington DC.
For more information please contact Michael at firstname.lastname@example.org
Michael Kahn, AIA
Director of Operations, Vice President
2 West 45th Street, Suite 502
New York, NY 10036