Loss Factor in Square Footage Measurements

[showtime]

I wonder if loss factors are as egregious in residential real estate as they are in commercial real estate. In the commercial world, it's common to see an office space advertised as 1,000 square feet but in reality be only approximately 700 square feet. That's a 30% loss factor, and the landlord won't blink an eye. For Class A commercial properties, you might see a 40% loss factor easily.

According to BOMA standards in 2017, a loss factor of up to 43% is permitted. That means common elements being included in the advertised space etc. It's crazy. That's why I always tell commercial tenants, you have to measure the space yourself.

[ryan_gz]

It's not just the loss factor you have to worry about, but the greed factor as well. If a landlord feels like they can't mess around with the actual rent rates, because the market perhaps is soft, then they will just mess around with the advertised size.

Remember, landlords will make no representation as to the size, you basically accept the property as is when leasing a commercial space. In fact, there are never any numbers in commercial floorplans, they're basically blank and useless. As a result, you should always go and re-measure the space yourself.

Remember, loss factor = (rentable space - usable space) / rentable space