9.1 II. The Space

• Jurisdiction: New York

II. The space

Office space priced per “rentable” square foot often turns out to be much more expensive than tenants expect because landlords may include space that tenants consider unusable. Normally, a tenant will be able to use only 75% to 90% of the space it pays for. This difference—the loss factor—depends on three things: the physical configuration of the offices, the landlord’s method of measuring rentable area, and, increasingly, the landlord’s whim.

Rentable area is sure to include a portion of elevators, janitors’ closets, lobbies, stairways, and more. Fair enough. Be aware, however, that some buildings have a higher loss factor than others. Fancy curves or sharp angles, elevator banks placed in the center of the building instead of on the side, and an abundance of columns in a tenant’s space contribute to a higher loss factor.

In addition, landlords often develop their own methods for measuring rentable area. A landlord...