Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Commercial Leasing Law & StrategyLJN NewslettersNewsSections

Measurement Standards in Commercial Leases and the Right to Remeasure

BY John G. Kelly
December 31, 2015

Commercial real estate is almost always leased based on the square foot. When determining the amount of square feet to be included in the lease calculations, most landlords use what is known as the “rentable area” or “gross leasable area,” which, depending on whether the real estate use is office, retail or industrial, usually includes more square footage than the tenant actually occupies. The method used to determine the square feet directly affects the amount of rent to be paid, and is therefore of paramount importance when entering into a lease. Establishing and understanding the standard for measuring rentable space is a foundation needed when negotiating commercial real estate leases. This article briefly describes the methods used to measure the rentable area for office, retail and industrial leases and suggests sample lease language for both landlords and tenants.

Office Leases

Generally speaking, the rentable area of office space is calculated by taking the usable space ' the space that tenants actually occupy ' and adding in additional factors (often called load factors) that proportion out pro-rata shares of the building's common areas. This allows landlords to charge tenants for the tenants' proportionate share of the building's common areas and service areas. This rentable area formula is typically calculated by taking the total space on a given floor of a building and dividing it by the usable space to get a ratio of total rentable to usable floor space. This ratio represents the factor to be added to an individual tenant's usable space to cover that tenant's share of the common area of the floor in which the tenant leases space. Additional factors can be included to calculate the factor required to cover the common area of the building as a whole. The typical standard that most commercial leases use is the one established by the Building Owners and Managers Association (BOMA). Since 1915, BOMA has been publishing a standard method of floor measurement for commercial leases.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Yachts, Jets, Horses & Hooch: Specialized Commercial Leasing Models Image

Defining commercial real estate asset class is essentially a property explaining how it identifies — not necessarily what its original intention was or what others think it ought to be. This article discusses, from a general issue-spot and contextual analysis perspective, how lawyers ought to think about specialized leasing formats and the regulatory backdrops that may inform what the documentation needs to contain for compliance purposes.

Hyperlinked Documents: The Latest e-Discovery Challenge Image

As courts and discovery experts debate whether hyperlinked content should be treated the same as traditional attachments, legal practitioners are grappling with the technical and legal complexities of collecting, analyzing and reviewing these documents in real-world cases.

Identifying Your Practice's Differentiator Image

How to Convey Your Merits In a Way That Earns Trust, Clients and Distinctions Just as no two individuals have the exact same face, no two lawyers practice in their respective fields or serve clients in the exact same way. Think of this as a "Unique Value Proposition." Internal consideration about what you uniquely bring to your clients, colleagues, firm and industry can provide untold benefits for your law practice.

Risks and Ad Fraud Protection In Digital Advertising Image

The ever-evolving digital marketing landscape, coupled with the industry-wide adoption of programmatic advertising, poses a significant threat to the effectiveness and integrity of digital advertising campaigns. This article explores various risks to digital advertising from pixel stuffing and ad stacking to domain spoofing and bots. It will also explore what should be done to ensure ad fraud protection and improve effectiveness.

Turning Business Development Plans Into Reality Image

This article offers practical insights and best practices to navigate the path from roadmap to rainmaking, ensuring your business development efforts are not just sporadic bursts of activity, but an integrated part of your daily success.