Net rentable area is the square footage a tenant is charged rent on, typically including their usable square footage plus a prorated share of shared common areas within the building, such as lobbies, shared hallways, or restrooms. This distinguishes it from gross square footage, which measures the entire building regardless of individual tenant allocation.
How net rentable area is calculated
Net rentable area is generally calculated as usable square footage multiplied by a load factor, which accounts for the tenant's proportional share of common areas. In single-tenant industrial buildings, usable and rentable square footage are often the same or very close, since there's minimal shared common area to allocate — the distinction matters much more in multi-tenant buildings.
What to watch for before committing
Measurement standard used
Confirm which measurement standard (such as BOMA) the landlord used to calculate net rentable area, since methods can vary.
Load factor reasonableness
Understand the load factor applied and compare it against typical ranges for similar multi-tenant buildings.
Verification through independent measurement
For significant leases, consider having net rentable area independently verified rather than relying solely on the landlord's figures.
Impact on total rent calculation
Confirm exactly how net rentable area, not just usable area, factors into your total quoted rent.
Consistency with marketing materials
Verify that net rentable area figures in your lease match what was represented during marketing and touring.
Single-tenant vs multi-tenant relevance
Recognize this distinction matters most in multi-tenant buildings and may be less significant if you're the sole tenant.
When you need to know this
- Comparing rent across buildings — understanding what square footage figure your quoted rent actually applies to
- Evaluating multi-tenant building leases — confirming how common area allocation affects your total rentable square footage
- Negotiating lease terms — verifying measurement methodology before agreeing to a specific net rentable area figure
- Budgeting total occupancy cost — calculating rent based on the correct net rentable area figure
Frequently asked questions
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