Why a Common Area Factor When Leasing Commercial Space?

When leasing commercial space there is more to your office space then just YOUR space.  What if you lease a commercial space on the 40th floor of an office building?

1. How would you get to YOUR office if there were no lobbies and elevators?
2. Where would you or your employees go to the bathroom if there was not a bathroom in YOUR space?
3. If you didn’t have a conference room where would you have large meetings if you could not access the building conference room?
4. How would clients get to YOUR office if there were no building corridors for them to walk through?

The answer to the above questions is YOUR building’s common area.  It’s the area that ALL the building tenants share and includes the lobbies, corridors, bathrooms, building conference rooms, fitness rooms & showers (if available), etc.

When you lease a 50 x 50 foot commercial space you are not just paying rent on THAT 2,500 sf.  You are paying rent on 2,500 sf PLUS your share of the building common areas.  So if the common area factor equaled 20% you would pay rent on 2,500 sf + 25%…….or 3,000 rental square feet.  Common area factors differ from building to building however in Austin, Tx for example they average 15% to 20%.