When starting out a real estate project, the way that square feet is calculated for lease purposes often trips our clients up. It can be confusing even for real estate professionals. The first step is determining the amount of usable and rentable square feet that a given tenant is occupying. But before that, you have to understand the difference between the two terms.
Net Usable Square Feet:
Usable square feet refers to all of the space that is used exclusively for a tenant. This is the area of demised space inside your office suite. The space is measured as if structural columns and entry/exit doors are not there. This includes private (tenant-only) restrooms, closets, storage and any other areas used only by the tenant. Net usable square feet does not include common area square footage.
Net Rentable Square Feet:
Net rental square feet is a term that combines usable square feet plus a portion of the common area. The difference between usable square feet and net rental square feet is generally between 10% and 15%, with rentable square feet reflecting a higher cost than usable square feet.