LOSS FACTOR

In New York City, square footage is a complex measurement.

Commercial landlords use “rentable square footage” as the measurement for their commercial office space. This measurement includes a proportionate share of common areas such as corridors, rest rooms and elevator vestibules. The “usable square footage” is equal to the measurements of the demised space from the window line to the demising wall. Usable square footage is always smaller than rentable square footage. The difference between the two is called a loss factor. New York City loss factors are generally between 20% and 40%. Loss factors tend to be greater for space on divided floors and less for full floor spaces.

Loss factors tend to be greater in office buildings constructed after 1970. This is because the large lobbies and elevator banks account for a larger proportion of common areas.

Loss factors are less for retail/store space; ranging between 5% and 10%.