Recently a landlord’s usable space calculations caused a great deal of agitation with a deal we were completing. How did I know if landlord’s erroneous floor plans were are mistake, or a sneaky profit center? It turned-out to be both, and a bit of negotiation posturing. This particular landlord thought he had a lot of leverage. Our architect discovered that the plan was about 12.2% smaller than the landlord represented. When we pointed it out to the landlord’s agent, she quickly retorted: “it is what it is – don’t waste your breath and you architect’s time. We will not allow tenants remeasure the space.” Negotiations with stonewalls like this can be handled easily and we eventually got the deal closed.
However, comparing SF in proposals can be a tricky business. It points to the reason why business owners and corporate decision makers alike have come to rely so heavily on architects and space planners to ensure their office space needs make sense. If you’re in the market to lease space, it behooves you to outsource the planning process to a professional architect, planner or agent-advocate who understands the substantial differences that exist between things like “usable square feet” and “rentable square feet”. If you’re going it alone, here are a few tips to help guide your way.
The usable square footage of a commercial space, while not always straightforward, is the most simplistic in terms of understandability. Usable square footage relates to the exact* number of square feet that you’ll have sole access to. If the usable square footage of a commercial property that you lease is 2,000 usable square feet, this means that your office space will be precisely that – 2,000 usable square feet. Confusion sometimes comes into play, however, when a landlord markets the exact same space claiming it to be 2,500 “rentable” square feet. In this case, the owner has included in the description of the commercial space those common areas of a building that you’ll have shared access to – or the “rentable square footage.”
You’re probably thinking: Hang on a second – why do I need to concern myself with the definition of “rentable” square footage? Here’s why: That definition comes heavily into play if you’re leasing a block of space in a building occupied by other tenants. Ultimately, the amount of money you’ll pay for the commercial space won’t be determined solely by the square footage of the offices you inherit, but also your pro-rata share of any common areas such as lobbies, hallways, stairways, and elevators. Landlords might also add other items such as overhangs and exercise rooms that you want to negotiate carefully.
If you’re thinking that you might be better off having your interests served by hiring an attorney or agent/broker, there’s reason to believe your mental processing tools (your brain) are in good order. Choose your attorney and brokers carefully. Make sure that they are well trained and have your best interest at heart.
*There’s nothing “exact” about the methods employed by landlords to measure office space in major markets like New York City, Los Angeles, or Chicago. Interested parties will likely be told to leave their measuring tape at home and send their architects to their rooms with no dinner. In other words, in such major markets, the space “is what it is.”