When evaluating commercial lease options it’s very important to understand the difference between usable square feet (USF) and rentable square fee (RSF) when calculating your monthly and yearly rent. This is often misunderstood by tenants as many landlords use different names for this such as R/U factor, common area factor, add-on factor, R/U ratio, etc. If you don’t know then make sure you know how many sf your company needs to physically be able to occupy and ask what the USF/RSF ratios are as the amount of rent you pay is determined by these numbers.
Usable Square Footage or USF
This is the amount of square footage that you actually occupy and do not share with any other tenants. This only includes the space that your furniture, equipment, and employees reside in. For example if you measure your office with a tape measure and come up with 10 feet x 12 feet or 120 square feet this is your usable space.
Rentable Square Footage or RSF
RSF is is the square footage used to calculate your rental rate. This is the USF + your share of the buildings common areas that are shared by other tenants in the building. Common areas shared by all tenants include restrooms, janitorial closets, electric and telephone rooms, lobbies, fitness center, etc. Common area does not include stairwells, elevators, and other mechanical space. In Austin, Tx common area percentages range from 17% to 21%. When asked how many SF a particular space is most landlords and listing agents will respond with the RSF however it’s important to confirm that number.
How to Calculate Rentable Square Feet
Let’s say your company needs to physically occupy 2,000 usf. The building you like has a common area factor of 20%. To determine your rentable square feet perform this calculation: 2,000 usf x 1.20 (common area factor) = 2,400 rentable square feet. When you ask landlords how many square feet they have available most of them will respond with the RSF.
Do All Buildings Have a USF and RSF?
No. In some buildings such as retail space or garden style office space your USF typically equals your RSF because these types of properties have no common areas and tenants have their own restrooms and entrances. When quoted a square footage it’s important that you confirm whether they are quoting USF or RSF.
There is no standard for how many square feet of common area buildings have. When asked how many sf an office space is most building owners and listing agents will respond with the RSF, however it’s important that you confirm whether it’s USF or RSF. As you compare buildings it’s important that you know how many square feet that you need to physically occupy AND ask each landlord what their common area factor is…………meaning HOW MANY SF WILL YOU OCCUPY VS HOW MANY SF YOU PAY RENT ON.