no free lunch series: useable vs. rentable square footage
September 14, 2012
the market minute
(**transcribed from video – linked above**) hi my name is eric odum; i’m the principal broker for Florida ROI Commercial Property Brokerage in tampa, fl. today we’re continuing on with our “no free lunch” series. we’ll be taking about useable vs. rentable square footage.
just a little bit on the no free lunch series. the concept came from a colleague of mine who used say if someone received something of value but they didn’t think they were paying for it. he would say “no free lunch.” meaning that you were essentially paying whether you knew you were paying for it or not.
so when i’m working on a tenant representation job in other words, a client is using me to help them find space. many times after two or three weeks into the process i’ll show them properties and they’ll call back and say, well eric i found something that seems to be equivalent but it’s two or three dollars less expensive than the other properties you have showed me.
the reality of dealing in dealing with multi-tenant office spaces is that it’s not a commodity. there are a lot of differences in space to space. the least of which, is the difference between rentable and useable square footage.
rentable square footage in multi-tenant office space is not the space that you get to occupy. rentable square footage is actually the amount you’re occupying plus some common load factor. common load would include bath, the hallways, the foyer, and all those common areas that everybody in the building gets to use.
building with large common areas typically large foyers and hallways etcetera, even though they might be less expensive on paper when you start digging a little deeper you realize they’re not less expensive.
now the price might be less on paper, but the reality is you’re paying for space you’re not using. so when you make an apple to apple comparison and actually make adjustments to the price that large common area space could be more expensive.
here’s the bottom line. multi-tenant office spaces are not equal. one of the biggest varying differences is rentable vs. useable square footage and how much common load the building actually has.
this should give you pause for thought when you are looking at a building that has large common areas, a large foyer. this might be the image you’re trying to create big marble entranceways; big marble hallways but understand that you’re paying for it. in the end there is no free lunch.
i hope you enjoyed our no free lunch program. i’m eric odum, principal broker, Florida ROI Commercial Property Brokerage.
check it out. i’m going to include a link on our web page which is www.roireal.estate .
no free lunch series: useable vs. rentable square footage
the market minute
(**transcribed from video – linked above**) hi my name is eric odum; i’m the principal broker for Florida ROI Commercial Property Brokerage in tampa, fl. today we’re continuing on with our “no free lunch” series. we’ll be taking about useable vs. rentable square footage.
just a little bit on the no free lunch series. the concept came from a colleague of mine who used say if someone received something of value but they didn’t think they were paying for it. he would say “no free lunch.” meaning that you were essentially paying whether you knew you were paying for it or not.
so when i’m working on a tenant representation job in other words, a client is using me to help them find space. many times after two or three weeks into the process i’ll show them properties and they’ll call back and say, well eric i found something that seems to be equivalent but it’s two or three dollars less expensive than the other properties you have showed me.
the reality of dealing in dealing with multi-tenant office spaces is that it’s not a commodity. there are a lot of differences in space to space. the least of which, is the difference between rentable and useable square footage.
rentable square footage in multi-tenant office space is not the space that you get to occupy. rentable square footage is actually the amount you’re occupying plus some common load factor. common load would include bath, the hallways, the foyer, and all those common areas that everybody in the building gets to use.
building with large common areas typically large foyers and hallways etcetera, even though they might be less expensive on paper when you start digging a little deeper you realize they’re not less expensive.
now the price might be less on paper, but the reality is you’re paying for space you’re not using. so when you make an apple to apple comparison and actually make adjustments to the price that large common area space could be more expensive.
here’s the bottom line. multi-tenant office spaces are not equal. one of the biggest varying differences is rentable vs. useable square footage and how much common load the building actually has.
this should give you pause for thought when you are looking at a building that has large common areas, a large foyer. this might be the image you’re trying to create big marble entranceways; big marble hallways but understand that you’re paying for it. in the end there is no free lunch.
i hope you enjoyed our no free lunch program. i’m eric odum, principal broker, Florida ROI Commercial Property Brokerage.
check it out. i’m going to include a link on our web page which is www.roireal.estate .
join us next time for the market minute.