The Meaning of "Gross Square Feet"
How does gross square feet apply to your commercial lease?
Gross square feet, also called gross area, refers to the total square footage of a building. Understanding it can be critical when you're entering into a commercial lease, but the term is actually somewhat misleading because gross square footage includes measurements that are both usable and non-usable by tenants.
Gross square feet is not just the total dimensions of floor plans for space that is occupied or able to be occupied. It includes common areas, building core and other areas of the building that may be used for maintenance and operations.
How Is Gross Square Footage Calculated?
The gross square footage of a building includes elevator shafts, vertical penetrations, equipment areas, duct work shafts and stairwells, as well as the usable square footage – the areas occupied by or available to tenants. It is determined by measuring from the outside faces of the exterior walls, not accounting for cornices, pilasters or buttresses that extend beyond the wall faces. Areas that have less than a 3-foot clear ceiling height are not included in the calculation.
Gross Square Footage Inclusions
Gross area, in addition to all internal floor space, should also include attics, covered porches, excavated basement areas, garages, inner or outer balconies, stairways and interstitial space, including mechanical floors or walkways. It includes corridors, walkways, mezzanines, penthouses, elevator shafts and vertical duct shafts.
Gross Square Footage Exclusions
Gross square footage does not take into account open areas like pools, playing fields, courts, light wells, parking lots, unexcavated basements and parts of upper floors that are eliminated by spaces or lobbies that are higher than single-floor ceiling height.
Net Square Feet
Net square feet should be not confused with gross square feet. Net square feet is usually used within a room and refers to square footage that can be used or assigned based on inside wall dimensions.
The term "building core" refers to areas that are not leased to any individual tenant but are available to and used by all tenants. These are gross square footage inclusions. Some of these areas may be referred to as rentable square feet, such as meeting places and lobbies.
Effect on Leases
In a typical commercial lease, you'll pay for the actual usable square feet of your space and a proportional share of common areas that are included in gross square footage. If your rented space, office or store represents 35 percent of the building's usable square feet, you may be responsible for a 35 percent share of the rent for the common areas.
These common areas may be excluded from the building's gross square footage if they're outdoors, but this doesn't preclude the landlord from charging for their use. The parking lot might be excluded from gross square footage, but you, your business – and your clients or customers – nonetheless benefit from it.
Gross square feet and common areas contribute to residential leases as well. You'll mostly pay more in a development that offers a pool and sauna than you would for a place that doesn't share these amenities.