Looking for a Small New York Office – Tip 1
Thursday May 3, 2012
Finding An Office Space
Finding the right office space isn’t easy and the real estate industry has its own lingo you should know before you start deciding what space to take. Probably the most important thing to understand is the difference between “rentable space” and “usable space.” You should know how to calculate exactly how much usuable space you’ll wind up with and the total rent you will be paying for the usablespace per month. In the end, that’s what you are really interested in.
Most often, rent is listed as cost per square foot a year. To find the total cost of the rent you will be paying each month is easy, all you have to do is use this rent formula:Cost Per Square Foot Per Year x No. of Square Feet ______________________________________ 12
Office Space Sizes
In all office space sizes you will see listed indicate rentable space, not usable space. It is common practice to include an allotment of the common spaces in a building (such as the halls, basement, bathrooms, lobby, staircases, etc.) in the rentable square feet. This isn’t space that the individual tenant can use for their own office per se. The additional space allotment is referred to as the loss factor, hence the formula for usable square feet (the actual amount of office space) is:
Usable Square Feet = Rentable Square Feet – Loss Factor
So a space of 4,286 sf rentable might have a loss factor of 30% resulting in usable square feet of only 3,000 sf. That means if you need, 3,000 sf, you will want to look for spaces that are 4,286 sf. Rental rates are charged on the number of rentable square feet. So if you need 3,000 sf and the rent is $50 a square foot, you will be paying $214,300 per year (4,286 sf x $50) or $17,858 per month. [Your rent will not be 3,000 sf x $50 = $150,000 per year or $12,500 per month.]
While loss factors when renting can vary, they are usually in the same ballpark. However, beside the loss factor rate, you must be careful to ascertain how the office space is measured and how the loss factor is calculated. There are generally accepted industry guidelines for these types of renting calculations, but there is no standard industry practice. Some landlords will aggressively maximize square footage calculations and the rent they charge.
Read Our Office Space Moving Guide
Finding a small office in New York City that fits your needs and budget is a daunting task — so is planning and executing your move. This is why we are offering you all of the information you need to move into a small office today — we are introducing an easy guide to help you through the entire process from deciding on what you need to logistics of the move itself. Click here for the full article.
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