Chapter 4 - § 4.2 • MEASURING THE PREMISES

• Jurisdiction: Colorado

§ 4.2 • MEASURING THE PREMISES

It is very common in a space lease to state the number of square feet contained within the premises. The same is true in leases for entire buildings. The square footage usually is important to the tenant for operational reasons. Space planning is largely accomplished by assigning a set number of square feet of space to each function within the organization. In many leases, the rent is expressed in terms of dollars per square foot, making the square footage a very important money term of the lease. In addition, in leases in which expenses are shared among two or more tenants, the allocation of the expenses usually is based upon square footage, again making the square footage financially significant.

One might think that measuring space could not be very complicated. Getting out a measuring tape and measuring the square footage of the space the tenant occupies does not, however, reflect all the space in the building from which the tenant receives a benefit. Taking into account the space the tenant benefits from, not just the space it uses, makes space measuring a bit more complicated.

Given the importance of square footage in leases, it is not surprising that a whole "science" of measuring leased space has evolved. The level of precision and accuracy in measuring space is almost directly proportional to the economic stakes. At $1 per square foot per year, neither the landlord nor the tenant may care much how the space is measured; at $30 per square foot per year, however, they tend to care a lot. Of course, it also depends on the size of the space — a tenant who is leasing a 2,500-square-foot space will not be nearly as fussy about the way its leased space is measured as a tenant who is leasing a 25,000-square-foot space.

§ 4.2.1—The BOMA Standards for Office Leases

The "science" of measuring space for office leases has been made relatively uniform by the wide acceptance among landlords in Colorado of the ANSI/BOMA Z65.1 Standard Method for Measuring Floor Area in Office Buildings, prepared by the Building Owners and Managers Association (a trade association commonly referred to as "BOMA"). The current version of the BOMA Standard, as it is commonly called, is the 2017 version. It replaces the 1996 and 2010 Standards, which tenants sometimes request because they are more favorable to them. The earlier versions are more favorable to tenants because, while each allocates a proportionate share of floor common area to the premises in calculating the rentable area, they allocate a lesser amount of building common area to the premises in calculating the rentable area.

Rentable Area Under the BOMA Standards for Office Buildings

There are two terms that are commonly used in measuring the floor area of leased space: "Useable" area and "rentable" area...