CRE 101 · deweyluong.realtor

Rentable vs Usable Square Footage Explained: Why Georgia Tenants Pay Rent on Space They Cannot Occupy

Rent in a Georgia office lease is charged on rentable square feet — your own space plus your share of the lobbies, corridors and restrooms. The space you can actually put desks in is the usable square feet, and the gap between the two is the load factor. On the made-up comparison on this page, a business that needs 4,000 usable square feet pays $112,000 a year in Building A ($25.00 per rentable foot, 12% load) and $114,680 a year in Building B ($23.50 per rentable foot, 22% load). The building that looks $1.50 cheaper per square foot costs $2,680 more every year — $13,400 over a five-year term — because the rate was never the real price. The rent per usable foot is: $28.00 in A, $28.67 in B. By Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 318 closed sales / $281.2M career volume · 678-707-2498

The worked example uses made-up, rounded numbers to teach the mechanics. This page is general education, not financial or legal advice.

The three numbers on every office quote

• Usable square feet (USF): the space inside your suite that your business exclusively occupies — offices, workstations, your conference room, your storage. It is the space you shop for, because it is the space your people and equipment have to fit in.
• Common area: the parts of the building everyone shares — the main lobby, corridors, shared restrooms, elevator lobbies, amenity space. No single tenant can use them exclusively, but every tenant uses them.
• Rentable square feet (RSF): your usable space plus your pro-rata share of the common area. Rent, tenant improvement dollars per square foot, expense pass-throughs and most other per-foot figures in the lease are calculated on rentable feet — the bigger number.
• Load factor (also called the add-on factor or common area factor): the percentage added to usable feet to get rentable feet. Rentable = usable × (1 + load factor). A related term, the loss factor, expresses the same gap as a share of rentable feet instead: loss factor = (rentable − usable) ÷ rentable. The two percentages describe the same space and are never equal — check which one a quote is using before you compare it to anything.

Why the load exists — and when it is fair

• It is not automatically a markup: a building with a real lobby, wide corridors and shared conference amenities delivers more than the inside of your suite, and the load is how the landlord charges for it. A low-load building is a more efficient building, not necessarily a better one — a 12% load on a building with no amenities and a 22% load on a building your clients actually enjoy visiting are different products.
• Efficiency is the honest comparison: efficiency = usable ÷ rentable. Building A below is 89.3% efficient; Building B is 82.0% efficient. Whatever the load, your cost per usable foot is the number that prices what you actually get.
• Measurement standards exist for a reason: office space is commonly measured under published standards (BOMA is the best known) that define what counts as usable, what counts as common, and where the tape goes. A lease that never names its measurement standard — or a landlord who cannot say how the rentable figure was produced — is a number you cannot verify, and unverifiable square footage is negotiable square footage.
• Retail and industrial are different: retail space is usually quoted on gross leasable area and industrial space on the building footprint, with little or no load added on top. The load-factor trap is mainly an office (and some medical office) trap — which is exactly where growing Metro Atlanta businesses sign their longest leases.

Worked example. The numbers below are made up and rounded to teach the mechanics. This is not a real property.

• The need: a made-up Gwinnett business needs 4,000 usable square feet — the desks, offices and equipment were counted first, in usable feet, before any building was quoted. That order matters: shop in usable feet, then convert each quote.
• Building A: load factor 12%. Rentable = 4,000 × 1.12 = 4,480 RSF. At $25.00 per rentable foot, annual rent = 4,480 × $25.00 = $112,000. Cost per usable foot = $112,000 ÷ 4,000 = $28.00.
• Building B: load factor 22%. Rentable = 4,000 × 1.22 = 4,880 RSF. At $23.50 per rentable foot, annual rent = 4,880 × $23.50 = $114,680. Cost per usable foot = $114,680 ÷ 4,000 = $28.67.
• The verdict: Building B quotes $1.50 less per square foot and costs $2,680 more per year — $13,400 over a five-year term, before rent escalations widen it further, because escalations compound on the rentable figure too. Compare buildings on total annual rent for the usable space you need, never on the quoted rate.
• The single-suite version: a suite quoted at 5,000 RSF and $24.00 per foot costs $120,000 a year. At a 15% load, its usable area is 5,000 ÷ 1.15 = about 4,348 USF — roughly 652 of the feet you are paying for are lobby and corridor. Your effective rate is $120,000 ÷ 4,348 = $27.60 per usable foot, and the loss factor is about 13.0%. None of that makes the suite a bad deal; all of it belongs in the comparison before you sign, alongside the effective rent after free rent and TI.

Four traps

• Shopping by the quoted rate: the rate is multiplied by a number that changes from building to building. Two quotes are comparable only after both are converted to total rent and rent per usable foot for the same usable requirement.
• Sizing the search in rentable feet: a business that needs 4,000 usable feet and tours "4,000 square foot" listings is touring suites that deliver 3,300–3,600 usable feet. The space plan fails after the lease is signed, when fixing it costs the most.
• Forgetting that everything else is per rentable foot too: a $20/SF TI allowance, an expense stop, a renewal rate — all of them ride on the rentable figure. A high load inflates your rent while it also inflates your TI dollars; run both directions before deciding which building the load actually favors.
• Never asking how the building was measured: rentable areas can grow on paper when a building is re-measured under a newer standard — the suite did not change, the invoice did. Ask for the measurement standard, the load factor, and both footages in writing, and put the rentable figure and the load in the LOI so the lease cannot quietly re-measure you later.

Cho nhà đầu tư người Việt

Khi thuê văn phòng ở Georgia, tiền thuê tính theo rentable square feet (RSF) — diện tích bạn thật sự dùng được (usable square feet, USF) cộng thêm phần diện tích chung như sảnh, hành lang, nhà vệ sinh chung. Khoảng chênh đó gọi là load factor: RSF = USF × (1 + load factor). Ví dụ trên trang này (số liệu giả định): một doanh nghiệp cần 4.000 USF. Tòa A có load 12% nên RSF là 4.480, giá $25,00/RSF, tiền thuê $112.000/năm, tức $28,00 cho mỗi foot dùng được. Tòa B có load 22% nên RSF là 4.880, giá nghe rẻ hơn — $23,50/RSF — nhưng tiền thuê là $114.680/năm, tức $28,67/foot dùng được: đắt hơn $2.680 mỗi năm, $13.400 trong 5 năm. Bài học: đừng so giá thuê theo con số chủ nhà chào; hãy so tổng tiền thuê cho đúng diện tích bạn dùng được, và hỏi bằng văn bản cả hai con số USF, RSF cùng hệ số load trước khi ký. Đây là thông tin giáo dục chung, không phải tư vấn tài chính hay pháp lý.

Frequently asked questions

What is the difference between rentable and usable square footage?

Usable square footage is the space inside your suite that your business exclusively occupies. Rentable square footage is the usable space plus your pro-rata share of the building's common areas — lobbies, corridors, shared restrooms. Rent is charged on the rentable figure. In the worked example, the same 4,000 usable feet become 4,480 rentable feet in a building with a 12% load factor and 4,880 rentable feet in a building with a 22% load factor.

What is a load factor in a commercial lease?

The load factor (also called the add-on factor or common area factor) is the percentage added to usable feet to get rentable feet: rentable = usable × (1 + load factor). The related loss factor states the same gap as a percentage of rentable feet — (rentable − usable) ÷ rentable — so a 15% load factor is about a 13.0% loss factor on the same space. Always check which of the two a quote is using.

How do I compare two office buildings fairly?

Convert every quote to total annual rent and rent per usable foot for the same usable requirement. In the worked example, Building B quotes $23.50 per rentable foot against Building A's $25.00, yet costs $114,680 a year against $112,000 — $28.67 per usable foot against $28.00 — because its 22% load factor multiplies the rate by more feet. The quoted rate alone never prices a lease.

Do retail and industrial tenants pay a load factor too?

Usually not in the same way. Retail space is typically quoted on gross leasable area and industrial space on the building footprint, with little or no load added. The load factor is mainly an office and medical-office issue. Whatever the property type, ask how the square footage was measured, which standard was used, and get the usable and rentable figures in writing before you sign.

Rentable và usable square feet khác nhau thế nào, người thuê người Việt cần lưu ý gì?

Usable là diện tích bạn thật sự dùng được trong suite của mình; rentable là usable cộng thêm phần diện tích chung của tòa nhà (sảnh, hành lang, vệ sinh chung), và tiền thuê tính theo rentable. Hệ số load factor càng cao, bạn càng trả tiền cho nhiều diện tích không ngồi làm việc được — ví dụ trên trang này (số liệu giả định): cùng cần 4.000 usable feet, tòa nhà load 12% thu $112.000/năm, tòa nhà load 22% chào giá rẻ hơn mỗi foot nhưng thu $114.680/năm. Hãy luôn so tổng tiền thuê trên mỗi usable foot, và yêu cầu cả hai con số bằng văn bản trước khi ký. Đây là thông tin giáo dục chung, không phải tư vấn tài chính hay pháp lý.

This page is general education, not investment, legal, tax, lending or financial advice. Every figure in the worked example is made up and rounded to teach the mechanics. Túy “Dewey” Luong, CCIM — Founding Broker, SERHANT. Atlanta · 678-707-2498 · dewey.luong@serhant.com