How do you truly calculate commercial square footage, from the inside or the outside? Include the walls?

We purchased a multi unit building and have the as-built, but the dimensions are being questioned by actual physical measurements taken from the inside of each unit. The inside calc is less than the as-built shows. Which one is correct?
In Leasing Property - Asked by Kelley C. - Jul 24, 2012
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Answer(s)

Matt C.
Developer
Sun Prairie, WI

For gross leasing area always include the total exterior building dimension. Rent is/should be determined by the entire area, meaning outside walls. If a tenant questions this, ask them if they actually want to use the exterior walls? If so, which obviously they do want the walls, then they need to pay for that area as well.
Hope this helps.

Jul 24, 2012
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Jill M.
Broker/Agent
San Antonio, TX

I agree with Matt C. The outside measurments is how you calculate the square footage, period. If it is a common shared wall then it is measured from the middle of the wall.

Jul 24, 2012
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Richard H.
Appraiser
South Pasadena, CA

Kelley, the type of property can influence which type of measurement is used. It is also a function of the local market. For example, in our market the size of a residential unit is quoted as the area found inside the unit. Some managers may also include the size of an individual patio. For office space it is common to include the enclosed common areas. In that instance you can have a unit with 1,000 square feet that can be used exclusively by tenant, and another 1,500 square feet of common area that can be used by other tenants too (e.g. lobby, hallways, restrooms, etc.) The additional SF is sometimes expressed as a "load factor". BOMA has some good descriptions on how to measure office buildings. Retail buildings are often measured based on how much space is used exclusively by the tenant. However, some buildings with interior common areas may include common area square feet too.

Jul 24, 2012
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David C.
Broker/Agent
Mount Prospect, IL

First two definitions:
1) Rentable square footage includes a proportionate share of the common areas that tenants share such as corridors, restrooms, and elevator vestibules, whereas 2) usable square footage is the space designated solely for the tenants use. It follows that usable square footage is always less than rentable square footage. 3) The difference is the loss factor.

An example: Building size 53,500 (as built). 45,000 usable
Loss factor equals 15.89%
Tenants space = 1,500 usable square feet + 238.35 (15.89%) = 1,738.35 rentable square feet
This is but a basic answer you should check with a BOMA professional or a certified space planner.
Hope this helps.

Jul 25, 2012
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Chris R.
Broker/Agent
Denton, TX

Can't have interior space without exterior walls.
SF of a retail space would be from outside wall to outside wall if no tenant on the other side of the wall. If a tenant is on the other side of the wall then from the outside of the wall (where no tenant is) to the middle of the wall of an adjoing space. Look at it as if the walls were not there - all you have is a slab. A tenant comes and wants 1,000 SF of "slab" space. So exterior walls are erected with the measurement beginning on the outer edge of the slab to the other 3 outer edges in order to lay out a space equal to 1,000 SF and then you build the walls. A commercial wall may well be 6 + inches thick all the way around. If you deduct that then you'd be leaving a 6" space all around a space of 100' x 100' feet.

Jul 25, 2012
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Aurelio M.
Broker/Agent
Torrance, CA

From the outside, for overall measurements, but what tenants usually get charged for is the commercial footage. It's not a good idea to put the square footage on a contract as the actual square footage. There are companies out there that represent tenants in renegotiating leases with landlords based on square footage descrepencies. Watch Out!

Jul 30, 2012
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Chris S.
Broker/Agent
Coeur D Alene, ID

The international standard is BOMA. They define how the calculations are to be made. Your lease should be very specific, if not the BOMA standards usually hold up in court.

Aug 1, 2012
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