What is Usable vs Rentable Area?
Usable area is the tenant's exclusive space; rentable area adds a proportional allocation of common areas, forming the basis for rent and CAM calculations.
Definition
Usable area is the space a tenant exclusively occupies — their office suite, retail bay, or warehouse space. Rentable area adds a proportional allocation of common areas (lobbies, hallways, restrooms, mechanical rooms) to the usable area, creating the figure on which rent and CAM charges are calculated. Tenants always pay rent and CAM based on rentable area, not usable area, which means the load factor markup directly affects their financial obligation. The ratio between rentable and usable area (the R/U ratio or load factor) typically ranges from 1.10 to 1.20 in office buildings. BOMA 2024 expanded the definition of rentable area to include qualifying outdoor spaces, potentially changing a building's total rentable square footage.
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