Although it may seem straight forward, it is something that tenants should pay attention and incorporate into original space planning. Below is a quick breakdown of the differences between the two.
Usable square footage (USF) is the actual space within the tenants four walls. It is the space that the tenant occupies and can use for its operations, such as office or manufacturing space. That doesn’t consider fitness facilities, café’s, bathrooms, lobbies, and any space that is not directly usable by the tenant.
Rentable square footage (RSF) includes both the usable square footage and a portion of the common areas in the building. It is the space that the tenant occupies plus a proportionate share of the common areas, which are shared by all the tenants in the building. This is also known as the “loss factor”.
Typically, the loss factor in a suburban property will be less than property located in a CBD. The loss factor ranges dramatically depending on the building type, amenities within the building, and several other factors. For example, a one-story flex building may not have a loss factor because usually there are no common areas shared by multiple tenants. On the other hand, a suburban office location typically ranges from 15%-25%.
In summary, USF measures the actual usable space occupied by the tenant, while RSF measures the tenant's usable space plus a proportionate share of the common areas. RSF is used to calculate rent and other lease costs, while USF is used to determine how much space a tenant needs for their operations.