The intricacies of commercial real estate demand a nuanced understanding of various space calculations. Gross Area Footage (GAF), Usable Square Footage (USF), and Rentable Area Footage (RAF) are three such pivotal metrics.
Their differences can dictate lease agreements, property valuations, and space planning. Let’s break down each term and provide clarity on their calculations.
Gross Area Footage (GAF): A Comprehensive Assessment
GAF is not just about the overall dimensions of a building. It’s a mosaic that brings together every architectural detail, structural facet, and functional space.
- Architectural Components: GAF encompasses wall thicknesses, column spaces, and vertical shafts—elements often missed in quick assessments.
- Strategic Implications: It offers a roadmap for potential space repurposing or redevelopment. GAF is also crucial for compliance with building codes and regulations.
- Operational Aspects: Facilities management professionals leverage GAF to plan maintenance schedules, safety protocols, and infrastructure upgrades.
Calculating Gross Square Footage:
To compute the GAF:
- Measure Externally: Begin by measuring the external dimensions of the building. This includes the total perimeter.
- Multiply Length by Width: For simple rectangular or square buildings, multiply the length by the width to get the total area for each floor.
- Sum Up All Floors: Multiply the area of a single floor by the number of floors in the building.
- Add Additional Structures: Don't forget to add in areas covered by external structures like sheds or garages.
Usable Square Footage (USF): The Tenant's Domain
USF refers to the space a tenant can actually use for their specific purposes, devoid of shared areas.
- Exclusivity: USF is all about the tenant's exclusive space. It doesn’t include hallways, lobbies, or restrooms shared with other tenants.
- Valuation Basis: Often, USF forms the baseline for calculating the cost per square foot in a lease.
Calculating Usable Square Footage:
- Internal Measurements: Begin by measuring the internal dimensions of the designated tenant space, excluding shared areas.
- Deduct Non-Functional Areas: Subtract areas within the tenant's space that aren't usable, such as structural columns or utility closets.
Rentable Area Footage (RAF): Maximizing Value and Utility
RAF goes beyond mere space allocation. It's the DNA of lease agreements and determines the tangible and intangible value a tenant derives from a property.
- Common Area Factor: This is a critical component. It determines how common spaces like lobbies, restrooms, and shared amenities are proportionally distributed among tenants, influencing the RAF.
- Value Proposition: A precise calculation of RAF can help landlords pitch their properties more effectively, emphasizing the balance between private and shared spaces.
- Lease Structuring: Detailed knowledge of RAF aids in crafting complex lease structures, including percentage leases where rent is a combination of a base amount and a percentage of the tenant's revenue.
Calculating Rentable Area Footage:
To derive RAF:
- Start with Usable Square Footage (USF): Begin by measuring the exclusive area designated for a tenant's use.
- Factor in Common Areas: Measure shared spaces like lobbies, hallways, and amenities. Distribute this area among tenants. This can be done by pro-rating based on the size of each tenant's USF or by equally distributing among all tenants.
- Add USF and Common Area Share: The sum of the tenant's exclusive area and their share of common areas gives the RAF.
Drawing Fine Lines: Navigating GAF, USF, and RAF
The distinctions between GAF and RAF are multi-faceted:
- Space Vs. Value: GAF represents a building's full footprint, USF indicates tenant-specific utility, and RAF combines utility with shared value.
- Negotiation Insight: A solid understanding of these distinctions offers leverage in lease negotiations, enabling favorable terms and rates.
- Design & Development Implications: Developers and architects can optimize space allocation considering the balance between GAF, USF, and RAF.
Real-World Applications: Strategies for the Savvy Professional
Understanding GAF, and RAF is not just academic.
It has practical, real-world applications that can significantly impact the bottom line:
- Portfolio Diversification: Investors can use insights from RAF and GAF evaluations to diversify their portfolios, ensuring a mix of properties that cater to different tenant needs.
- Dynamic Pricing Models: Property managers and landlords can deploy variable pricing based on RAF metrics, especially in mixed-use developments where different tenants derive varied value from common spaces.
- Risk Management: A detailed understanding of GAF can aid in better risk assessment, especially when considering properties for redevelopment or repurposing.
Building Measurement Standards: GAF, USF, RAF in Context
To ensure consistency and accuracy across the commercial real estate sector, there are established building measurement standards.
Key among these are BOMA (Building Owners and Managers Association), REBNY (Real Estate Board of New York), and RICS (Royal Institution of Chartered Surveyors).
These standards not only streamline the measurement process but also offer guidelines on how terms like GAF, USF, and RAF are approached and defined.
BOMA: A Global Standard
- Overview: BOMA provides guidelines primarily for office buildings, both in the US and internationally. Its standards are comprehensive, addressing various property types like mixed-use, retail, industrial, and more.
- GAF, USF & RAF in BOMA: BOMA makes clear distinctions between terms like "Gross Measured Area" (similar to GAF) and "Occupant Area" (akin to USF). For example, in a multi-story office building, BOMA would calculate the USF as the sum of all the tenant-specific areas, excluding common spaces. The RAF would then add a tenant's proportionate share of building common areas to the USF.
REBNY: Tailored to New York’s Unique Landscape
- Overview: REBNY’s standards cater specifically to New York City's distinctive real estate environment, which often involves historic buildings and unique space constraints.
- GAF, USF & RAF in REBNY: REBNY might calculate the GAF of a historic NYC building by measuring from the outer surface of exterior walls, incorporating all areas within. For USF, spaces like exclusive balconies or terraces could be considered, differing from other standards. REBNY’s approach to RAF might involve detailed allocations of building lobbies or shared rooftop terraces among tenants.
RICS: A British-rooted, International Standard
- Overview: Originating in the UK, RICS standards are now applied worldwide, offering a comprehensive framework called the "RICS Property Measurement," which includes office, residential, retail, and industrial properties.
- GAF, USF & RAF in RICS: For an industrial property, RICS might define the GAF as the total area within the property boundaries. The USF might be calculated by measuring all areas within a tenant's demised space, subtracting structural elements. RAF, as per RICS, would be the USF plus a consistent percentage of shared areas like utility access paths or shared loading docks.
How to measure spaces for Gross, Usable, and Rentable Area Footage
Here's a guide on how one can get their space measured for Gross Area Footage (GAF), Usable Square Footage (USF), and Rentable Area Footage (RAF).
If you're looking for a rough estimate, you can attempt to measure the space on your own.
- Tools Required: Measuring tape, laser distance measurer (for more accuracy), grid paper, and a pen or pencil.
- Measure the length and width of each room or area of the space.
- Sketch a rough floor plan on grid paper, noting down measurements.
- Calculate the area of each room by multiplying its length by its width.
- Sum up the areas of all rooms to get an approximate total.
This is a very lengthy process and not recommended for large spaces or buildings.
If you have access to the existing floor plans of a property you might have a good base to get started.
However, it’s important to consider:
- Create date: Drawings older than a couple of years might already be out-of-date and not fully capture any renovations that have occurred since leading to wide inaccuracies.
- Limited Access: The reality is that many building owners do not have access to up-to-date floor plans, and in some instances any drawings at all.
- Difficult to update: Existing documentation like this would be difficult to update and would require either going back to the original team behind the drawings or hiring a new service provider that would not rely on those documents to start.
Relying on existing floor plans is a good starting point but should not be relied upon for accuracy and up-to-date measurements.
SCANIT: Easily gather GAF, USF, and RAF
For more accurate and detailed measurements, especially in commercial spaces:
- Hire a reality capture service like SCANIT: A SCANIT technician will use specialized equipment and software to measure the space with high precision. They're especially useful for large properties or spaces with irregular shapes.
- Fast turnaround: With SCANIT, you can mobilize an on-site visit in days not weeks and receive robust documentation quickly.
- Instant quote: Unlike other surveyors, SCANIT can provide an instant quote with a clear estimated turnaround time.
- Receive a detailed report and audit of areas and elements: Our SCANIT service delivers more than a report. We provide a complete inventory of all your building elements which is useful for additional compliance and tax incentives, depending on your market.
In commercial real estate, the right insights lead to informed decisions.
A grasp of metrics like Gross Area Footage, Usable Square Footage, and Rentable Area Footage, coupled with precise calculations, equips professionals with tools to negotiate better leases, purchase and sell properties with accurate underwriting, and enable teams to perform renovations with accurate measurements from the start.
While DIY measurement to produce these metrics seems cost effective, and existing floor plans might provide a good starting point, using a digitally enable service like SCANIT would provide fast turnaround, instant quotes, and a complete audit of all of your areas and building elements.
If you’d like to get accurate GAF, USF, and RAF measurements of your space start a quote with SCANIT today.