Load factor is a multiplier applied to usable square footage to calculate net rentable area, representing a tenant's prorated share of a building's common areas. A load factor of 1.10, for example, means a tenant's rentable square footage is 10% higher than their usable square footage to account for shared space allocation.
Typical load factor ranges
| Building type | Typical load factor |
|---|---|
| Single-tenant industrial | 1.00–1.02 (minimal common area) |
| Multi-tenant flex/light industrial | 1.05–1.15 |
| Multi-tenant office-heavy building | 1.10–1.20+ |
What to watch for before committing
Load factor reasonableness
Compare the quoted load factor against typical ranges for similar buildings to assess whether it seems reasonable.
What's included in the common area calculation
Understand exactly what shared spaces are factored into the load factor calculation.
Consistency across competing offers
Ensure you're comparing load factors consistently when evaluating multiple building options.
Impact on total effective cost
Calculate how the load factor affects your true cost per usable square foot, not just the headline rentable rate.
Verification of underlying measurements
For significant leases, consider verifying the underlying usable and rentable square footage figures that produce the stated load factor.
Negotiability
Recognize that while load factor itself is generally a function of building design rather than negotiable, understanding it helps you negotiate effective rent more accurately.
When you need to know this
- Comparing multi-tenant building options — normalizing rent comparisons that involve different load factors
- Calculating true cost per usable square foot — understanding how load factor affects your effective occupancy cost
- Evaluating office-heavy vs pure industrial buildings — recognizing typically higher load factors in office-oriented spaces
- Verifying lease square footage accuracy — understanding the relationship between usable and rentable figures in your specific lease
Frequently asked questions
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